The global financial landscape is changing. With the US housing bubble bursting, major banks around the world reported losses and liquidity concerns. This evolving financial crisis had a serious adverse effect on trust between banks, consequently damaging the relationship between banks and customers on global markets.

New Media is a means to build up trust and maintain a successful customer relationship

Web chronicles, such as blogs or Twitter, might support a bank in building up a trusting relationship. US banks Wachovia and Wells Fargo used web chronicles to keep customers informed and to stand by them in these rough times.

US based bank Wachovia made an appearance on Twitter in August 2008. Originally aimed to listen to customers closely, the dynamics of the finance crisis quickly hit Wachovia. After reporting losses of 8.9 billion USD for the first quarter 2008, newscasts reported on September 29 that the banking operations were about to be acquired by US Citigroup, facilitated by the FDIC. However, on October 3, Wachovia announced instead that it would entirely merger with Wells Fargo, foreclosing governmental assistance. In the interim, Wachovia suffered from a large outflow of deposits, accumulating to more than 5 billion USD in that week.

During this time, Wachovia continued to post on Twitter. Already on September 17, both a link to an interview with the CEO on CNBC as well as a reply to many customer inquires was posted, reassuring that Wachovia was well capitalized.

Over the following weeks, Wachovia remained to follow the process closely, posting messages on Twitter and continuously linking to news releases and background information. Wachovia uses Twitter to answer questions in public and is still keen to inform on any subjects raised in the Twitter community.

Wells Fargo is one of the most innovative banks to use New Media

Besides various online tools and community events, Wells Fargo also incorporates four blogs on its corporate website, covering topics from student issues to the Wells Fargo history. With the finance crisis hitting the US banking system, Wells Fargo quickly posted a CEO statement on the corporate webpage. However, the Wells Fargo bloggers also shared their views in the more casual blogging language, addressing concerns and worries with readers and customers.

On October 6, Staci Schiller, marketing program manager for Wells Fargo Education Financial Services, posted a blog post on the Student LoanDown Blog, writing about her increasing mortgage payments. Seeing her assets falling and her debts rising, she expressed to be “pretty worried” about her finances.

In contrast, Bob Chandler posted the blog post “Wells Fargo Stands Strong”, giving light to the historic roots of Wells Fargo. He shares a story of the 23-year-old-agent John Q. Jackson, who responded to a bank run in 1855 with the “Wells Fargo way”, standing steady at the customers’ side and thus building trust with the bank.

Web chronicles are an intriguing means to keep customers informed on any level of information. Standing by the customers with New Media might facilitate the basic principle of banking: trust. Read more

Pro 

- direct level of communication

- instant customer feedback and involvement

- low cost communication channels

- high employee involvement and courage

Con 

- low reach

Conclusion

The challenge is to use New Media appropriately as a supplement to other communication channels, to involve engaged employees properly and to meet the communication standards of the respective media. Properly used, New Media is an effective means to reach customers on a personal and direct level.