Banks are still juggling how best to use social media to communicate to customers-especially when other systems go down.
Bank of America's decision to use Twitter to announce an online banking outage has drawn mixed reviews, ranging from kudos for broadening its communications horizons to questions as to whether the blast was broad enough.
At around 7 a.m. on a January Friday, BofA experienced a partial outage of its online banking service. The Charlotte, N.C., bank used Twitter to get the word out, but it did not announce the outage on its home page. Impacted consumers simply got an error message.
"It is helpful if the bank sees [social media] as a part of their other communication channels," which should also include branches, call centers, the Web and mobile, says Stessa Cohen, research director for banking industry advisory services at Gartner. "It is part of a holistic plan to deal with operational risk events."
Over Twitter, BofA broadcast this message: "Online Banking Outage: Bank of America is working to restore capability as quickly as possible. We apologize for any inconvenience."
It also replied to individual Twitter users with a similar explanation. Though it reaches more than 7,000 Twitter followers worldwide, BofA spokeswoman Tara Burke said the bank opted not to put a message on the Web because the outage did not affect all customers. "Every situation is different and we determine on [a] case-by-case basis," Burke says. She said BofA also informed call centers about the outage.
Burke said the outage was likely the result of routine system changes the bank performed the night before and was not a sign of a security breach or a malware infection. The bank has reportedly been targeted by WikiLeaks for a release of leaked internal documents. BofA has halted processing of payments to the site, a move that's resulted in other payments firms-such as MasterCard, Visa and PayPal-being targeted by hackers sympathetic to the WikiLeaks cause.
Cohen said the problem with making the announcement on the Twitter page was that it reached a smaller number of customers than the number affected - but Twitter was still a good start. She pointed to the dangers such outages cause when information is not so forthcoming, such as happened to JPMorgan Chase & Co. in September 2010 when its site went down for a full day.
"Chase did not get the word out well, and it was really criticized for being too slow" to do so, says Mark Schwanhausser, senior analyst for multichannel financial services at Javelin Strategy & Research. Transparency is crucial to banks fostering good customer relationships, he says.
"Let the consumer know where they stand," Schwanhausser says. "The consumer counts on the bank, and if the bank goes quiet, it creates anxiety."
Ron Shevlin, a senior analyst at Aite Group LLC, says lack of that messaging may be because the public Website was impacted as well. "Bank of America is a smart bank that has been doing [online banking] a long time," he says. "If there is no message on the home page, there is a good reason." Shevlin said he could not access his own account Friday.
James Van Dyke, the president and founder of Javelin, says the lack of a home page message could be related to the complexity of BofA's systems. "Bank of America's [online system] is actually a combination of several different systems owing to their [acquisition of] prior separate organizations," he says. "So the challenge faced by their professionals is larger than one faced by a community bank or credit union."
