Banks, Regulators Must Leverage Social Media to Meet CRA Requirements
May 3rd, 2009Redondo Beach, CA – Banker and social media author, Jesse Torres, today urged banks and bank regulators to utilize social media (Web 2.0) as part of their Community Reinvestment Act (“CRA”) programs and financial literacy initiatives.
In an April 20, 2009 press release, Comptroller of the Currency (“OCC”) John C. Dugan stated that “financial literacy is the first step toward financial success for our kids and for many older consumers. These programs spread the word that financial knowledge can help them protect, manage, and invest their money better. For banks that means increased opportunities to expand their customer base and deposits, increase customer loyalty and satisfaction, and target initiatives to low- and moderate-income communities to earn positive CRA consideration.”
Social media is the ideal tool for banks and their CRA Officers. Through social media banks can accomplish many of their CRA objectives including:
- Reaching and communicating with teens and young adults in a manner that they are comfortable with;
- Improving the bank’s reputation and positive word of mouth by demonstrating that the organization listens, cares and is capable of interacting with consumers at a human level;
- Leveraging of knowledgeable and scarce bank resources through increased use of video, blogs and other tools – reducing the amount of time spent outside of the bank; and,
- Providing a valuable service at a reasonable cost.
”Regulators have placed a premium on banks’ financial literacy efforts. The FDIC has gone as far as developing and distributing financial literacy training materials to financial institutions in an effort to encourage broader participation by the banking industry,” said Mr. Torres. “While everyone can benefit from such efforts, emphasis has been placed on outreach to children, youth and young adults, who may not have any financial management skills or training. Of particular focus are those from low- and moderate-income communities, which the CRA explicitly seeks to benefit.”
“Based on Generation Y’s large-scale adoption of social media platforms such as Facebook, MySpace and Twitter, as well as a substantial increase in adoption of social media by Gen X and baby boomers, banks would be well served to leverage social media as a platform for financial literacy and CRA compliance. With a modest cost of implementation and a tremendous potential for positive returns, social media is an ideal solution,” said Mr. Torres. “As with any new product or service, there are pros and cons. However, a well thought out strategy can provide not only valuable CRA credit as an “innovative” solution but can also positively affect a bank’s bottom line as positive word of mouth is converted to banking products and services.”
Jesse Torres is a banker and the author of The Community Banker’s Guide to Social Network Marketing, a free 70-page primer on social media and social networks available at http://www.tinyurl.com/cbgsnm. Jesse can be reached by e-mail at [email protected]. He can also be found on LinkedIn at http://www.linkedin.com/in/jessetorres and on Twitter at http://www.twitter.com/jstorres. His blog, Social Media and Banking, can be found at http://socialmediabanking.blogspot.com.
