Banks must grapple with social media’s inherent risks

Consumers are more reliant than ever on social media to get information. Social media feeds came second only to TV when US consumers were asked for their top sources of news and information, per a September 2023 UNESCO and Ipsos survey.

However, consumers’ reliance on social media doesn’t mean they trust it. Among US consumers, 64% consider social media feeds a top source of “fake news” and disinformation—far higher than any other channel, per UNESCO and Ipsos. This attitude could translate to information about banks on social media, undermining their perceived trustworthiness and eroding consumer confidence.

Major content and cybersecurity mishaps in recent years demonstrate platforms’ limited ability to maintain companies’ brand safety.

• In spring 2023, spoofed social media accounts and misinformation posts by bots on Reddit and X (formerly Twitter) contributed to the collapse of First Republic Bank by causing catastrophic deposit runs. There have also been reports of scammers impersonating banks on WhatsApp to defraud customers.
• In January 2024, the official X account of the Securities and Exchange Commission (SEC) was hacked and posted misinformation in the regulator’s name. X blamed the SEC for not having enabled two-factor authentication, a security feature it limited to its paid subscription tier in March 2023.
• Also in January, Tinder parent Match Group complained to Meta that its ads were appearing next to Instagram Reels featuring “disturbing” and “illegal” content, as well as in a Facebook group promoting violence against women. Walmart filed similar complaints.

Despite such high-profile fiascos, social media platforms are weakening their oversight capabilities. X and Meta have reduced their content moderation teams over the past 12 months. And both companies plus YouTube parent Alphabet have gutted or weakened their AI ethics oversight and content moderation teams in the past four years. That’s left banks largely flying solo when it comes to maintaining their brand safety on social media.