The strictly regulated financial services sector has been slow to adopt social strategies, but as increasing numbers of customers start to integrate social into their lives, it’s becoming disadvantageous to stay on the sidelines. Tamara Littleton, CEO of social media management agency, eModeration, explains why the sector is starting beginning to embrace social, and details the benefits to be gained by engaging with customers.
The financial services sector, initially slow to take up the transparency of social media, is starting to warm to the idea (including having its own social media summit in 2011). As more of us turn to social media platforms such as Twitter to resolve customer service issues, banks have use social channels to respond.
Financial organisations such as banks have argued that customers wouldn’t want to interact with a sector not normally perceived as engaging. While some in the industry may have felt this, the motivation is more likely to have been a lack of knowledge regarding how financial organisations can use social media within the regulations, and confusion over why they would want to use it in the first place. What would be in it for them?
The truth is they may no longer have the choice. If customers choose to speak to their bank over Twitter, there has to be an official presence there to respond, or the bank risks looking out of touch. The increasing popularity of social media has driven financial institutions to investigate how they can use social media to communicate with customers within the regulations. HSBC, for example, launched a Facebook competition in 2011 asking for students to submit a video which explained how they intended to make their mark on the world, with the eight winners receiving a £15,000 student bursary. The campaign attracted a reported 40,000 votes.
Clearly, people are interested in engaging with financial organisations over social media – if the content is engaging and there is a motivating factor. But what’s in it for the industry?
Customer service – Twitter accounts such as @askciti and @WellsFargo have been set up to respond to customers and enable the organisations to track customer interaction with the company.
Research, development and insight – social media enables rapid insight from the existing target audience. One great example of this is the First Direct Lab, which First Direct uses to road-test new ideas. Social media can also enable quick problem reporting and allow the financial organisation to resolve issues before they cause significant disruption.
Recruitment – JP Morgan uses its Facebook community to give potential employees a look behind the scenes and shows a more human side to the bank.
Sharing information – the easier it is for people to find news and information about a company, the better. Not everybody buys the FT. Launching an online newsroom, as HSBC has, encourages bloggers, commentators and journalists to go direct to the bank for information and updates.
Creating brand ambassadors – by using social media to develop and distribute reward programmes, exclusive offers, competitions, etc., financial organisations can encourage loyal customers to share their positive experiences via social media.
Reach a younger audience – banks have always worked hard to capture the student market: customers who should go on to earn higher than average salaries and are unlikely to change banks afterwards. But other financial organisations face a greater struggle. Pension providers have a bigger hill to climb: issues such as trust, confusion and uncertainty prevent younger people from contributing, and therefore anything a provider can do to demystify pensions is a bonus. For example, Aviva’s Magic Money campaign took to the streets – and social media – to entertain and enlighten younger people about managing money.
Despite the benefits of engaging people over social channels, financial organisations must ensure that they are prepared to invest sufficient time and money in the exercise. Communities need to be managed and moderated, or risk becoming more of a reputational albatross than a boon. Official social pages need to be updated frequently and with engaging content. Tweets and Facebook wall posts must be responded to immediately, not ignored or left to attract negative attention whilst an approved response is sought.
Financial organisations with a clear strategy and a good understanding of what social is, and what they and their customers want to get out of it, will find engagement immensely rewarding.
This article is based on a white paper on a whitepaper: A guide to managing social media engagement for financial organisations, which is available for free download from http://www.emoderation.com/about/publications.
By Tamara Littleton
CEO
www.eModeration.com
