2024 Journal of Community Bank Case Studies

2024 COMMUNITY BANK CASE STUDY COMPETITION

withdrawals technology allows. According to Randy Black, FCCB’s CEO, SVB, for example, started having issues on March 8, 2023, when it announced plans to restructure the bank’s investment portfolio. The bank anticipated it would take $1.8 billion in losses with the expectation to receive roughly $2.25 billion in capital (Wack). As soon as that information hit social media, it spread rapidly. When depositors heard the news, they quickly fled (Black). Within just two days, the bank experienced over $40 billion in depositor withdrawals, technology and social media acting as a catalyst accelerating the bank run (Barr 7). In the past, depositors would need to go into the bank or write a check to withdraw funds. Electronic funds transfers (EFTs), ATMs, and mobile applications have streamlined this process, making it easier and faster than ever before. According to the FRS regarding SVB, “[t]his run on deposits ... appears to have been fueled by social media and SVB’s concentrated network of venture capital investors and technology firms that withdrew their deposits in a coordinated manner with unprecedented speed” (Barr 24). Communication management quickly became an uncontrollable issue, news spread like wildfire, and due to poor liquidity and risk management practices, SVB went under. Part III.2: Platforms Driving Profitability FCCB’s primary social media channel is Facebook. The bank uses Facebook for most of its online marketing and communications. As a marketing tool, Facebook is used to drive profitability through paid and organic advertising campaigns

on the platform. Heather Sargent, FCCB’s Director of Marketing, describes the bank’s Facebook campaign advertising strategy as follows: “ We focus on markets where we’re brand new, and we often enter those markets with some kind of product special ... the beautiful thing about social media is that it allows us to define our target audience very closely. So, it’s more than just persons within a geographical area, we’re able to target them based on their interests and information that Google has collected on those individuals, helping to ensure the advertising is getting to the right people.” (Sargent) Each campaign also has a landing page on FCCB’s website, which the bank uses to track the traffic and interactions of customers who arrive on the site from each campaign. This way, the bank can easily gauge the effectiveness of each campaign and marketing efforts based on this information. Tracking social media traffic and customer interactions, combined with the ability to target

...technology and social platforms have become

essential for banks for communication, advertising, and competitive purposes.

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