Twitter is a real-time online social networking platform founded in 2006. As of 2012 it reported over 500 million active users generating over 340 million tweets daily, making it one of the world's most visited websites.
Banks are reaching out to potential and existing customers through social media, but they are in no rush and caution is the watchword
It took less than 140 typed characters to wipe US$140 billion off the value of US stocks last Tuesday. After hackers broke into Associated Press' Twitter account and tweeted that there had been two explosions at the White House, injuring President Barack Obama, the markets went into a tailspin.
Within minutes of the false tweet, Twitter suspended the account and both AP and the White House confirmed that it was a hoax. But the message had already been retweeted more than 3,000 times, sending the benchmark S&P 500 index down almost 1 per cent.
Behold the power of social media.
Banks are circling this puzzling yet powerful medium. They want to use Facebook, Weibo, Twitter and the like to connect to their clients. They understand that young people use social media, and that it's a great way to reach out to them and recruit them as customers.
Marketers and communications specialists see social media as the next frontier, and believe failure to shape a strong social media strategy puts them and their clients at risk of getting left behind. Nevertheless, banks are deeply ambivalent about it.
Yet there are some good examples out there. Industry insiders say American Express and Citi are firms that get Twitter right.
Citi has localised Facebook pages for eight countries in Asia (though not for Hong Kong), and provides its own Twitter feed in Australia.
DBS has a lively presence on Facebook, with more than 150,000 fans across several pages aimed at Singapore, Hong Kong and mainland China. It uses Facebook mostly to promote its brand, not to dispense financial advice.
"Most often the financial information we put out on social media is more generic," says Glenda Chu, the head of group strategic marketing and communications at DBS. "They are quick tips, product offers and promotions. Financial advice should be tailor-made for each person. That's where our relationship managers, as well as our customer service people, come in."
DBS' Singapore Twitter feed also serves as a customer service channel. Young people in particular see Twitter as the quickest way to contact the bank. The bank does a good job of answering customer queries on Twitter. Responses are quick and customised, even if many clients are subsequently told to call the service hotline.
Standard Chartered operates a Hong Kong Facebook page and a page dedicated solely to its annual Hong Kong marathon.
Marged Lloyd, Standard Chartered's head of online communications, says people take it for granted that they can communicate with the bank through social channels, adding that clients in India and Singapore routinely contact the bank through Twitter and Facebook.
Apart from that, few banks in the region have a social media presence. The Post reached out to more than a dozen lenders and most declined to comment, typically because they did not have a fully-formed strategy to discuss.
The Financial Brand, a branding resource for retail banks, released a study last year that found 21.3 per cent of US retail banks Twitter accounts were dormant or had been abandoned. It wasn't for lack of effort - the average bank quit Twitter only after sending 128 tweets.
One communications manager at a global bank who wished to remain anonymous says her firm is lukewarm about social media.
"You know you got to be there but you don't know how," she says. "And if you make the jump, you can't extract yourself from the conversation."
The AP incident also showed how easy it is to hack Twitter. Many global brands, including Fifa, CBS, Burger King and Jeep, have also had their Twitter feeds hijacked.
And you don't need to hack into an account to steal an identity. In February, Li Ka-shing was also the subject of a hoax that circulated on Facebook and other online forums. The post, written in Chinese, offered get-rich-quick tips purportedly from the 84-year-old tycoon and received more than 10,000 "likes" and 12,000 "shares".
Incidents like these give banks pause for thought. If a hacker seized a bank's Twitter feed and flashed a bogus message about a terrorist attack or a natural disaster, the image consequences would be devastating.
Then there's the question of tone. The best social media sites are unruly. Many people throw in comments, sometimes searingly negative, sometimes involving profanity. Banks, which spend a lot of money developing well-honed brands, might cast a baleful eye over all that.
Banks might also wonder if social media is the right way to reach out to clients. Not everyone wants to communicate with a bank through the same channel they use to talk to friends.
Ian Ewart, head of products, services and marketing at private bank Coutts, says the formality of lenders' messages to clients does not always suit social media.
"Nobody wants to meet their bank at a party," he says. "If I'm in a certain environment and I'm doing my fun things and following my football teams, do I want to hear about managing investments? The answer is perhaps not. We try to be quite selective and try to stay in an, if not serious, at least not frivolous conversation."
Coutts uses LinkedIn, Twitter, Facebook and YouTube. It also launched a "Knowledge Exchange" last year, allowing clients to interact with other clients and market experts while retaining a level of privacy and security.
Banks have plenty of good ideas on how to use social media. They are good with technology and they have no shortage of money to hire top consultants. They know a relationship through social media can be influential. But they also know that once they venture into the social media realm, they are at risk of losing control of their message.
DBS's Black Card frequently appears to Hong Kong Facebook users as a paid ad in their "news feed". People are invited to comment on card promotions and the response has been strong - more than 1,700 people "like" the page and it generates dozens of favourable comments. But one malcontent says: "Worst card and service I have ever had".