I was very interested to read Simon Pitman’s article “Adapt or Die”, which discussed how the financial sector has been relatively slow on the uptake of social media. While I agree with Simon on a number of the points that he made, I feel that there is a strong case to argue that not only has the financial sector embraced social media already, but it has actually been innovative within it.
I work for a spread betting and CFD company and part of my remit is formulating the company’s social media strategies. To add to some of the restrictions that Simon mentioned in his article, one of the most common complaints I get for this industry is that it is simply too “boring” to make an impact in social media. Frankly, this is just a myth; in the same sense that saying compliance regulations constrict social media usage is just an excuse not to use it.
Financial Companies Leading The Way
And here’s why: studies have shown that companies in the financial sector are leading the way in embracing social media. Twitter is a prime example of this. Simply Measured’s Twitter customer service study tells us that it is American Express who are in the top three brands for engagement, and it is HSBC who lead the way in average response time, as well as having an impressive response rate.
In many ways, Twitter has revolutionised how we read and trade the financial markets. Due to it being such a popular social media platform for traders and brokers alike, that the Twitter team introduced a bespoke dollar tag to use for the latest equity updates (check out $GOOG, for Google). Our analysts will tweet from anything between 35-70 tweets a day just for market updates for our followers, while the teams at Bloomberg and Reuters will get through even more. And it’s not just white noise; many Twitter users are actively engaging with these tweets, while others have gone so far as to predict that Twitter sentiment influences the stock market. As a result of this study, Derwent Capital Markets has launched an entire broker model on this Twitter sentiment.
A Sector Breaking New Grounds
We may be on the brink of “social trading”. A quick look at the Facebook page of eToro, which labels itself as a social investment network, reveals over 150,000 likes. Traders with eToro can not only place their own bets based on the company’s frequent social media updates, but can also adopt a CopyTrader strategy, mimicking another trader’s market moves.
These are just a few examples of not just the power that social media has, but how a number of companies within the financial sector have embraced it and used it to their advantage. Obviously, as Simon mentioned, compliance and regulation is a huge part of our industry and our communications. Managing your risk in social media is perhaps even more important in the financial sector, as a result of regulations from the FSA for example. To that end, something that we’ve implemented (and I’m sure many others have too) is a social media “playbook” – defining what our purpose is online and how we can and should interact to different kinds of interactions.
Hopefully this shows how the financial sector has embraced social media for both customer service and marketing reasons. I would also join Simon in encouraging any other companies within the sector, who perhaps may have been hesitant to use social media before, to get involved as well.
To say that if you do not, you will be left behind may be a tad premature, but it is certainly heading in that direction. Companies who do not have a Facebook, Twitter, LinkedIn or even Google+ page are fast becoming anomalies and so I believe it is imperative for your brand to be seen by the masses. I’m reminded of the Hewlett Packard LinkedIn Case Study, which found in its results that unaided brand awareness had undergone a significant increase, just as a result of HP creating a LinkedIn discussion group.
I believe Simon is absolutely correct that those in the financial sector who get to grips with social media can get some great results. Where we perhaps differ is that I believe a host of companies are already doing just that. More companies will need to follow suit, but there are those in the financial sector who have not only embraced social, but are breaking new ground within it.
Tom Roberts is an SEO & Content Specialist at ETX Capital.