Does social media make sense for financial services? Especially, when it comes to B2B vs. B2C?
In the following, I’ve collected some research on the impact of social media on financial services from the perspective of a CEO. It includes information on the best use of social media for CEOs to impact company results.
1. How Social Media Is Shaping Financial Services (Huffington Post, Richard Eldrige, January 2016)
“Social media is transforming banking relationships in very significant ways, from improving customer service to allowing users to send money to others via online platforms. New financial technology companies are using social media data to help people get access to credit or even simply open a bank account.
Social media can even impact your ability to get a loan. Integration is happing so quickly, it is possible to argue that social media platforms may be the banks of the future.
Social media marketing can no longer be disassociated from a company’s overall marketing strategy, forcing them to adopt not only a data-driven approach but also a test-and-learn mindset that can handle an ever-changing social environment.
According to Accenture, the results are clear: better segmentation, real-time marketing, reduced acquisition costs and quicker time to market are requirements of a solid marketing strategy.
Many online retail P2P lenders such as Lending Club and Prosper, and small business lenders such as Kabbage and OnDeck have grown exponentially by using online and social media as their core marketing channels.
More traditional companies are also investing in social media integration. American Express, for example, links a client’s Amex card with his or her social media profiles on platforms such as Facebook and FourSquare, and then delivers deals based on activity such as likes and check-ins. The credit card company has won awards for this social innovation.
Social media is changing the way the financial services industry operates; the future is bright for increased financial inclusion, lower costs and better customer service. It remains to be seen who will ultimately emerge as the dominant force in finance, the traditional incumbents or the FinTech challengers.”
Here an example for app usage:
“In October 2013, ICICI bank, an Indian multinational banking and financial services company, launched Pockets, a mobile app that allows users to login to their bank using their Facebook credentials. The app allows users to send money to friends, pay utility bills, recharge mobile phones, and buy movie tickets. The fact that banks are using Facebook credentials to verify identity marks an important turning point for banking institutions.”
2. Secrets From the Top 100 CEOs on Social Media (Medium, Ryan Homes, April 2016, @invoker)
“Define your “why” and your “what”: Before sending out your first Tweet, know your objective. In simplest form, this means thinking about what audience you want to reach and what change you want to provoke, from raising awareness among customers to boosting engagement with employees. Equally important is understanding “what” you want to share. Your team will help crystallize this, but the most effective social CEOs offer a window into their world — company, passions, hobbies, etc.
Share real insights from the front lines (and do it regularly): Building an audience and establishing yourself as a thought leader starts with sharing quality content. This can take the form of behind-the-scenes pics, industry insights, short videos, company updates or even impromptu posts on food and hobbies. With your collaborators, decide on the right mix of personal and professional, as well as planned and spontaneous content. The real key to success — and where most CEOs fail — is simple consistency. Set up a regular schedule that fits your calendar. This can be as minimal as allocating 5 minutes every Monday to chime in on breaking news, 5 minutes on Wednesday to shoot a 30-second leadership short with your phone and 5 minutes on Friday for a company update.
Get help: You have no time as it is. So how are you supposed to manage a social media account? While the personal touch is key in social media, the truth is that very few social CEOs engage without a person or team behind them. This can be a specialized social agency or a member of your marketing or PR squad. (Just don’t leave your voice in the hands of an intern.) With a support staff in place, you’re free to focus on injecting insight and personality — maximizing the return on your time investment, however, limited that may be. I can’t emphasize this enough: The right support will make this entire process easier — from strategizing on what to post to ensuring that all content is safe and compliant.”
3. How the Financial Industry Can Embrace Social Media and Remain Compliant (Hootsuite, Michael Aynsley, April 2016, @MichaelAynsley)
“Companies that are doing well on social media are realizing the power of listening. Social media is a conversation, and you really need to listen first and talk second.
Additionally, an advisor who’s savvy on social media could go on LinkedIn, get connected with his clients, and then whenever he has a meeting with that client, he can look and see who else that client also knows and ask for an introduction. It’s a great way to potentially double your referrals with social media. You want to look at LinkedIn like your modern day Rolodex.
FINRA and SEC guidelines categorize social media content into two buckets: static content and interactive content. When it comes to static content, it is considered the same as an advertisement and requires pre-approval by a principal of the agency. Interactive content, on the other hand, is considered the same as a presentation in front of a live group of investors. Interactive content does not require pre-approval, but it does require archiving and post-review. The majority of social media posts and discussions will fall into the interactive category—but check with your compliance department for specific firm rules.
Education is key. You can’t just launch a software tool and expect adoption. It’s something that advisors need to learn. And the deeper their understanding the more they’re going to realize this is a shortcut that saves time rather than one extra thing on their plate.
It’s also about setting the right mindset for engaging on social media. The product sale isn’t happening on social media, but as an advisor, you’re earning the right to a phone call—for a meeting. So you need to stop measuring social media in terms of “The ROI that I got was X amount of dollars of new assets under management.”
Think about your goals being, “Alright, this week I’m going to have five phone calls as a result of somebody I met on LinkedIn.” It’s those phone calls and meetings that will lead to increased revenue.”
4. 6 Ways for CEOs to Become More Actively Engaged on Social Media (eContent, Nicole Johnson, July 2016, @nicjohnmedia)
“A 2015 Weber Shandwick study of company executives found that CEOs who engage on social media are seen as good communicators, and are among the most well-regarded. CEOs are considered “social” if he or she does at least one of the following:
- Is active on at least one social media network
- Engages with customers and employees via a company website through email, video, or audio
- Authors thought leadership content on a company’s blog
Who is the most engaged CEO on the Fortune 500 list? Jack Salzwedel (@AmFamJack) of American Family Insurance, with over 7,000 followers and 8,000 tweets.”
5.The Social CEO: Executives Are Using Social Media To Transform Firms (Forbes, Joanna Belbey, November 2016, @Belbey)
“We explored how the use of social media by senior executives within Financial Services impacts employee engagement and company revenue. We found that there’s a 40% increase employee engagement as a direct correlation to CEO or executive engagement. We learned that when sales teams are engaged on social media, they’re 50% more likely to achieve sales quota. That directly impacts revenues. We also discovered that companies with social executives, or Social CEOs, have a better overall brand perception in the marketplace. These Social CEOs attract talent and drive sales.”
“For us, the most significant thing is we were able to document strategic dissemination. That’s something in our field that hasn’t been done because there are few settings where a researcher can disentangle information from dissemination,” Naughton says.
There is a lesson here for corporate social media managers, Naughton says. “It turns out that it is okay to go overboard on the good news and be a little bit more reluctant on the bad news.
People have limited attention spans and don’t always peruse company-mandated disclosures, the researchers say, so a business can craft how investors see the firm by only posting positive information to social media.”
7. Last, an interesting example is Oliver Bussman, who was CFO at SAP when I worked there, then moved to USB and now has his own advisory. He was already one of the top C-level people on social 10 years ago and is still leading, in his core competencies as well as in social media! (@Obussman)
I would love to hear about your own experience with social media and financial services! @NaThomson