4. Mai 2023
Foreign Policy on the power of social media on finance
Foreign Policy wrote an interesting article titled 'Social Media Is Now a Financial WMD' (link: https://bit.ly/44wdFnP ).
According to the article, the collapse of Swiss bank Credit Suisse in March was triggered by a tweet, highlighting the growing risk social media poses to the banking sector when combined with digital banking. Australian reporter David Taylor's tweet about an unnamed major investment bank being "on the brink" went viral, with rumors pointing to Credit Suisse. Despite deleting the tweet, the bank's shares plunged, and it never recovered, eventually being taken over by UBS.
Social media has drastically changed the relationship between banks and clients, with customers now seeking information from blogs and social media platforms. In the era of digital banking, trust is harder to regain once lost. The fate of Credit Suisse serves as a wake-up call for banks, emphasizing the need for communicative leadership and a network of online influencers who can be mobilized during crises. Banks must also learn to use social media to engage and listen to their clients, as similar situations could happen to any bank.
The analysis of the Credit Suisse crisis is quite thorough, and it's valuable to read it carefully to avert the recurrence of similar mistakes.