The revolution that the business world is undergoing with the advent of social media, the challenges and impact of their usage or lack thereof, and the proper way for organizations to engage in them in order to reap the benefits and mitigate the risks, continue to be at the center of discussions and debate. While most industries have been harnessing the power of social media for quite some time to get close to their customers and start paying attention to their needs, the financial sector, traditionally slow to embrace change, has been lagging behind.
There are valid reasons why the financial sector has been slow to embrace social media. First, this is an industry traditionally not in a position to take big risks. Second, financial sector companies must face and abide to an immense amount of laws and regulation, hence it is often not easy to distinguish between what is accepted and what is not. More importantly, this sector always has its initiatives and decisions closely followed by the markets, and has paid dearly for mistakes and lack of judgement, not only in monetary terms, but most importantly, in terms of reputation.
Yet, smart financial organizations are realizing that putting a solid, yet cautious, social strategy in place can far outweigh the risks associated with it, and today global corporations such as American Express and Mastercard are slowly turning their social presence to a centerpiece of their interaction with the markets. And many of them are becoming very good at it too. Citibank, with over one million fans on its USA Facebook page, is focusing its daily communication on creating conversations and engaging its fans around issues they care about like sports, travelling and food, ignoring all banking and financial related issues (they do ask fans who ask financial type of questions to use a personal message instead). And Morgan Stanley, a company rich in history and tradition, recently changed its rules to allow over 18,000 analysts to leverage Twitter and LinkedIn for business and customer communication. Of course, the social messages these people use come from a list of pre-approved content, yet it is a huge step towards embracing social practices and modernizing the way they communicate.
So, let’s see in a nutshell a few areas where financial sector companies can use the power of social media to help differentiate their brand, and make it stand out from the competition by offering unparalleled customer experiences. According to a report by Brandwatch (Financial Services/ 2014, Social listening & financial services: An industry snapshot) these areas are:
- Campaign Measurement: One of social media’s biggest benefits is the insight it can provide into evaluating the results of various types of campaigns. Numerous metrics such as reach and conversation volume, can accurately demonstrate the impact and ROI of social media and content marketing efforts.
- Customer Service: Customers want answers and they want them fast and on specific channels. Social media is the best channel to address the need for speed and promptness, and a great way to turn difficult situations into opportunities to help the brand shine in the eyes of the consumers.
- Reputation Management: Financial brands have always found it hard to keep a positive image among consumers, even more so today, when one “entertaining complaint” in social media can go viral and escalate into a full blown crisis in less than 24 hours. The ability of consumers to influence corporate behavior and impact reputation, has made the need for organizations to listen carefully to them – in real time – ever more critical.
- Command Centers: A command center enables an organization to function as designed, and is a source of leadership and guidance. Social media command centers can be deployed in financial organizations, to present analytical social media results across every company department.
To bridge the gap between reaping the benefits and mitigating the risks of social media engagement, financial organizations will continue to invest in educating staff on social media fundamentals, and will establish clear company rules for company and personal use. At the same time, they will have to ensure that owned media operate under clear guidelines to meet company and industry standards and regulations, and are flexible enough to adjust to new social media advancements.
Financial sector organizations, although slow to embrace the power of social media, have started to take notice and will continue to take big, albeit careful, steps, towards connecting with customers in a meaningful way, utilizing various social media platforms and tools, and taking full advantage of what new digital technology has to offer.
Alexandros Mantikas, Director of Sales, Marketing & Communications, Cententia S.A.