The Finance Sector is Starting to Look Beyond the Dangers of Social Media

Social media provides an opportunity for the finance sector to revive relationships and rebuild trust with the public after the recent economic crisis. Despite this, only 36% of organisations in the finance sector are using social media to support their business activities, and 11% have fully integrated online strategies, according to CICERO Consulting’s January 2012 figures. Fear of lack of expertise, compliance issues, potential brand damage and difficulty in measuring ROI, are some of the issues driving companies away from fully investing in a social media strategy.

With 57% of financial service professionals interested in using social media to communicate with their clients and potential clients, combined with the effects of the economic downturn, there is no better time to jump on the social media bandwagon and reach out to current and potential consumers – as long as it is done right.

The first step to building a platform for success in social media is to understand how your target market or audience wants to be communicated to. For example, GlobalWebIndex data shows that 60% of US internet users want organisations or brands to improve their knowledge and 47% want them to keep you informed on the product and the company, and 22% are motivated to follow a branded page on a social network if they are able to interact and talk to people at the company directly, so employees need to be easily contactable through the medium of social networks. Conversely, the most important way for a brand to behave in Japan is by entertaining their audience as 82% want brands to connect to them in this way, and 65% are looking for brands to improve their knowledge.

When the audiences’ needs are identified, the company can start deliberating about the amount of investment needed to produce an effective social media campaign. It is important to understand that although social media is a cost effective method of increasing brand awareness and customer services, it does involve investing a lot of time and resources. Spending on social media is low compared to other forms of communication; according to CICERO “59% of firms are spending less than £50,000 per year on social media and 29% are spending nothing”.

This use of social media within finance is expected to rise as a number of firms are beginning to open up to the possibilities that it can offer them. Twitter is a key platform to watch out for; according to CICERO 81% of financial sector professionals believe Twitter to be the most important social network for their firm, although it has been reported that only 0.05% of financial services twitter accounts are verified as the official brand page (Christophe Langlois, Visible Banking, October 2011). In fact, our data at GWI shows that 52% of US financial professionals have an active profile on Twitter compared to 91% who have an active profile on Facebook.

Nevertheless the walls are coming down – Goldman Sachs are looking for a “social media community manager” and gave their first tweet on their Twitter page on 24^th May 2012 after months of no updates. RBS Group also made their social media debut on Twitter this year. Earlier this year Bloomberg reported Deutsche Bank’s authorisation of one of their investment bankers to have a business-related Twitter account, with their first tweet posted in January.

It will be interesting to see the number of organisations that follow these companies’ steps and witness the rise in social media strategies in the financial sector.