The rise and popularity of social media have had a dramatic effect on the ways people interact and share information on a personal level, and many banks have embraced social media as a way to improve customer engagement. But when it comes to bringing social media tools into the enterprise for business uses such as collaboration and project management, the revolution has not been quite as pronounced.
That's especially true in banking, where the use of social tools for internal business collaboration is still in the nascent stages, according to some experts. Part of this is due to regulatory and compliance factors that need to be taken into consideration, as well as the difficulties of making the business case for adopting these tools, some say. However, when banks are able to adopt the best practices for taking advantage of social channels internally, it can lead to a much more efficient and collegial work environment. For example, internal collaboration tools can help break down the often siloed nature of bank organizations, making it easy to connect team members from different organizations within the company who are working on the same project. Other benefits can include helping new employees by offering pre-employment orientation, and even reducing the amount of email and paper communications internally, experts say. But so far, banks by and large have not embraced social collaboration tools to a great extent.
"We're still in the early days of using social collaboration tools in business in general, and banks face some additional challenges," notes Sam Maule, a manager with Carlisle & Gallagher Consulting Group.
These challenges include issues around regulatory compliance and risk management, he says. "This is a highly regulated industry," Maule points out. "With the financial data and personal information that banks have, there has to be a high level of control."
While banks can take extra precautions to make sure such sensitive data is protected if it's viewed in a social collaboration tool -- for example, an internal wiki or Facebook-type of communication platform -- many compliance departments may be unwilling to even risk the exposure of this kind of information, Maule notes.
Another factor hindering banks' use of social media for internal collaboration is that it's generally difficult to measure the return on investment for these kinds of tools, notes Maule. "What we see among our client base in financial services is that by default ROI comes into every conversation," he adds. "When you're talking about collaboration tools, measuring ROI is difficult."
However, Chris Psaltos, VP of product management for Scivantage, which provides Web-based front- and middle-office technology to the financial services industry, believes the regulatory issue "is sometimes used as an excuse" and blames the "monolithic nature" of bank organizations as a major factor inhibiting the adoption of social collaboration tools. "Banks are a bit behind the curve when it comes to this," he says. "There are pockets of firms that are ahead and doing interesting things, but that's not the norm. Especially with larger banks, things tend to be in a 2001 structure from a planning and communications perspective and a bit reactionary from a market trends perspective."
In his experience, Psaltos says, there also is some resistance from the IT side of the bank to implementing these kinds of tools. "Sometimes the technology group is holding the reins," he says. "The business side wants to be able to jump leaps and bounds ahead, and they are being constrained by the technology group."
Some of that has to do with the size of the banks, Psaltos believes, adding that regional banks are able to adapt a bit better than the largest institutions. "They can make a big change in a much less expensive manner than a bigger bank," he notes. "When talking to folks at some of these regionals, they have a lot more autonomy compared to some of the larger banks. There is a flatter decision tree."
Regardless of the obstacles, Carlisle & Gallagher's Maule says banks should adopt social collaboration tools, as he believes the use of these platforms will eventually become commonplace for internal business use and project management in the business world. "[Social media] isn't something we're going back on," he says.
For banks to successfully implement internal social platforms, Maule emphasizes, there needs to be a firm top-down commitment. "It needs to be driven from the enterprise level," he says. "You can protect the data and manage it right and be compliant, but you need that organizational commitment." That may entail going ahead on a social collaboration project even if an ROI case can't immediately be made for it, which may put an additional burden on the CIO to integrate these tools into the existing technology infrastructure.