Social media, whether we like it or not, has taken over.
Marketing departments throughout the globe are now (more often than not) incorporating social media—be it Facebook, Twitter, Instagram and/or Linkedin—into their yearly plans.
These platforms and a host of others have broken down business barriers by allowing companies to engage with clients, potential customers, competitors and other interested parties in real time, expanding their business opportunities and building a strong brand name with just the click of a button.
Some companies involved in providing financial services have jumped on the social media bandwagon and adopted some of these innovative communication technologies. Progress, however, has been slow as a result of stringent and/or unclear regulations on the use of social media in the sector.
The situation is changing, though, for the best, and there are plenty of benefits to be had by embracing these tools.
For instance, engaging in direct conversation with potential customers. Per an article in Banking Technology, Gallup, the public polling giant, claims “customers that interact with their bank using social media are 12 per cent more likely to be mass affluent and 18 per cent more likely to be emerging affluent.”
Are you thinking of setting up an online presence to market your products and services? If so, what are a few of things you need to consider before diving into the fascinating world of social media?
Here are a few Taxlinked.net tips on using social media in the financial services sector.
Set Objectives & Strategy, Train Your Staff
Great! You’ve created a Twitter account, added a company profile page on Facebook and followed UBS on LinkedIn. Now what?
The first step when joining the social media world is to define your objectives and select a strategy that will allow you to pursue and accomplish them. Furthermore, put together an intensive training program in digital marketing that will teach your employees how to properly use these new technologies in search of your goals.
Kitty Parry, creator of the Social Media Charter, believes every single employee in a company should undergo social media training.
In an important article for the Huffington Post, she says, “Companies that stop their employees using social media are ignoring the now almost universal penetration, in developed countries, of smartphones and tablet devices. The reality is that people will use social media both in and out of the office.”
Drive Sales & Marketing
Many financial services firms are using social media to drive sales and boost marketing opportunities among their clientele.
But keep in mind that solely posting pretty pictures, solid financial performance statistics and special offers will only take you so far.
Many financial service companies these days use social media to collect in-depth information on their market to then target it with tailor-made products and services and creative ad campaigns that will be effective and lead to increased sales.
According to a 2014 Brandwatch Financial Report titled Social Listening & Financial Services: An Industry Snapshot, “further research into the demography of the market, differences across platforms, topic analysis, comparisons to competitors and regional variances - among countless other possible avenues of investigation - can reveal a rich cache of insights for a financial brand to optimize the ways it creates, and markets, its services.”
Improve Customer Service
Many financial services companies are relying predominantly on social media to carry out customer service.
According to the aforementioned Banking Technology article, “Research has indicated that social media is the most cost-effective channel for delivering customer service. For example, handing a customer service request via social media costs less than £1, while handling the same request via the phone costs around £3.50.”
Besides saving money, using social media for customer service allows companies to improve and streamline their business processes and incorporate technologies that capture useful data, while providing people with faster and more efficient solutions to their problems. Instantaneous response and being able to react swiftly to changes in the market are few of the many benefits of using social media to retain and expand your customer base.
Additionally, given this generation’s penchant for the online world, it will be much easier to connect with this group of people via social media than via traditional and—let’s be honest—outdated marketing and public relations ploys.
Some companies, for example, have started taking into account voice of customer (VoC) in customer relationship management (CRM) practices by looking for additional feedback from customers and target markets on relevant discussions.
Standard Bank accomplishes this by using tools such as polls and surveys to collect additional data and interact with their clients. Sample Standard Bank questions to its users include “What do you look for in a bank?” and “Which Standard Bank self-service channel do you use most often?”
Pick the Right Tools
With so many social media platforms out there, it might be cumbersome to pinpoint which one will best suite your business needs.
Twitter, for one, has worked well for many banking institutions.
In 2014, BNP Paribas, a longtime tennis supporter, won a Shorty Award (the equivalent of an Oscar for Social Media) for “Tweet and Shoot,” a campaign that enabled fans to train French tennis star Jo-Wilfried Tsonga.
On an online platform, participants selected a series of shots that was then programmed into a tennis ball machine that replicated each one at a later date for Tsonga to hit back on a tennis court.
To be honest with you, words don’t do this justice so here’s a short video.
TD Ameritrade has also benefitted from the use of Twitter by personalizing, authenticating and humanizing its interaction with its clients.
Nicole Sherod, Managing Director of Trading, says in a US News & World Report article that Twitter allows her “to have an even closer relationship with my clients and to know them better. They continue to post content all weekend, so you can see them with their kids and what they’re doing, and the same for me – they see what I’m doing after hours, and it allows you to build that relationship.”
Follow Industry Rules
Communication via social media is regulated for companies in the financial services sector so compliance many times makes it difficult to adopt these technologies.
In any case, it’s possible as long as companies make sure they’re aware of these rules before sending out their first tweet or post on Facebook.
In the US’s case, for instance, Denise Valentine, a Senior Analyst at Aite Group, writes “The U.S. Financial Industry Regulatory Authority published Regulatory Notice 10-06, which set out guidelines for social media. The notice is an interpretation of existing communication rules that acknowledge the new media, and essentially says that all social media interactions must be captured and archived. This includes static content―a company or individual profile on LinkedIn―as well as interactive communications.”
Furthermore, Valentine says in the previously quoted US News & World Report article, companies “can’t make recommendations over the Internet and social media or post anything that sounds like you’re advocating something.”
Regulatory notice 10-06 was later followed by 11-39, which provided "further clarification concerning application of the rules to new technologies" but did not "alter the principles or the guidance" presented in the original notice.
In the rest of the world, however, social media regulations might not be as advanced as in the US.
Kitty Parry, in another article this time for Techonomy, seems hopeful when it comes to the development of global rules on the usage of social media in the financial services sector.
She says, “In the U.K. we have been working closely with the Financial Conduct Authority on its final guidance on social media. For industry, we have drawn up a Charter that gives firms guiding principles that help them remain compliant. We have expanded on these principles to develop a platform for financial services to engage in social media. We are now beginning talks with global regulators and aim very soon to expand the platform to other countries.”
So, first things first, read up on the rules. Then, tweet away. Chirp, chirp.
Question: How do you use social media to develop your business? Tell us your stories in our comments section!