7 Benefits: Why financial service providers are taking to social media

Financial organisations have traditionally shied away from using social media to connect with customers. In such a regulated market, who could blames them?  And who’d want to ‘engage’ with their bank anyway?

As ever, things aren’t quite that simple. The under 24s prefer to sort their customer service issues out over social media, and research has shown that people want to interact with brands – including their banks, it would seem – on social networks. As a result, a number of banks and financial organisations have started to develop their social media presences to service this increasing demand for social interaction – and they can do this well within regulations. As we’ve seen with that resignation letter from Goldman Sachs, having no or little  social media presence yourself doesn’t stop your customers, employees and potential recruits using Facebook and Twitter to talk about you.

Social channels allow brands to listen to what customers want and try to provide it; and it’s no different for financial organisations. It can also be a great way to communicate with younger audiences, as HSBC knows. It launched a Facebook competition which invited students to submit a video detailing how they planned to make their mark on the world. The winner, decided by user votes and a judging panel, received a £15,000 Student bursary.  Last summer, the campaign attracted around 40,000 votes and attracted wide praise.

Of course, ‘engagement’ isn’t reason enough for any brand to invest in social media. That engagement has to be meaningful, and contribute to the overall business goals of the company, whatever they may be.

There are some clear business benefits that financial brands are starting to see from social media:

1.    Customer service – American bank Wells Fargo and British bank Barclays use Twitter to respond to customer service queries. Personal financial issues can’t be solved over public forums like Twitter – for regulatory reasons apart from anything else – but a brand representative can apologise and take the conversation offline, quickly. (Social media users have come to expect incredibly quick responses from brands and having a delayed or poor response can be just as damaging as having no presence or response at all.)

2.    Developing brand ambassadors – we know that people like to share their negative brand experiences via social media, but they will also share the positive.  It’s true that brand ambassadors can be created by using reward programmes, competitions and exclusive deals;  but by offering a fast, polite and friendly social media experience, banks can also develop a great reputation among followers.

3.    Capturing and retaining younger audiences – financial planning has the reputation of being both dull and complicated, which means the brands providing these services have to work even harder to capture the interest of people. Social channels can be a good way to get interest from younger customers: pension provider Aviva launched its ‘Magic Money’ social media campaign to get younger people talking about pensions with their friends.

4.    Research and development – asking questions of the community and gathering feedback enables financial brands (such as First Direct with its First Direct Lab) to test the water for new products.

5.    Insight – listening on social channels is a great way for financial services providers to hear what customers are saying about them. If something isn’t working, you have the chance to change it, before any minor niggles become major causes of complaint.

6.    Sharing information – services like the HSBC online newsroom make it easier for content to be shared throughout the web, and encourage bloggers and journalists to pick up news items and contact the brand directly for more information, thus increasing brand visibility.

7.    Recruitment – banks have taken a massive reputational hit recently, and social media can act as one way to show a bit more transparency, or showcase the positive side of the brand, to attract the next generation of employees. JP Morgan’s Facebook community provides its audience with a behind the scenes view of life at the bank. Barclays has a Facebook page dedicated to UK campus recruitment; and a social hub on its website for graduates, which includes blogs from those on the graduate scheme, competitions and the ability to find and tag yourself in photos taken at recent graduate events. All elements that help people understand the brand’s ethos, and what it might be like to work there.

For more information on how financial organisations can use social media download eModeration’s free Guide to managing social media engagement for financial organisations.