The social media dilemma for the world of finance

The City of London home of financial services in the UKWhat’s the point of social media for financial services companies? I was asked by a client recently. Easy peasy, I thought, and started trotting out well practised verses including phrases like “engagement” and “community”. Yes, but why should we do it? He asked. What’s the benefit to my business?

I was momentarily stumped. Working in financial services PR, I’m asked a version of this question weekly. Teenagers, media types and many consumer-facing brands have embraced social media, finding creative uses for the seemingly limitless number of platforms launched every year.  

But increasingly, financial services PRs are being challenged – and rightly so – to explain the benefits of social media beyond its use as a customer services channel or extension of a marketing department.

As Simon Pitman from Integritie wrote in his blog ‘Adapt or Die’ financial services companies are usually early adopters of new technologies which have a beneficial impact on the bottom line but with social media, and other new marketing techniques, they have shown a remarkable lack of enthusiasm.

In fact last year, The Sunday Telegraph reported that investment in social media marketing by financial services companies had declined sharply since the end of 2011 from an already low base. The suggestion was that many brands, particularly those selling direct-to consumers, were beginning to reject the notion that they should always communicate publicly. PRs always like to talk about “controlling the message”, meaning we work hard to ensure our client’s business is accurately represented in the media, but of course its nigh impossible to do this within social media. There are countless case studies of brands falling foul of an ill-judged Facebook campaign, an inappropriate Tweet, or a Wikipedia editor with a suspect sense of humour.

So you can understand my client’s question. Why get involved with all that hassle when “traditional” forms of media engagement – such as bylined articles, or letters to the editor – are so much more reliable (and less likely to result in pages of abusive status updates).

Like so many of the things we do in PR, this one comes down to evaluation. We spend a lot of time demonstrating the value of our work through complicated systems of performance measurement, analysing sentiment, gauging impact on reputation, and so on. Here’s where social media can really come into its own. The Holmes Report into trends for 2013  claimed that social media is compelling the PR industry to develop explicit ways to demonstrate its value – leading to more detailed benchmarking in order to prove its worth: “There’s a difference between a retweet and a Pinterest pin”. The report also highlighted the growing importance of strategic data mining, and PR will play a crucial role in helping brands connect the insights from their client data with the information from social media.

So back to the original question. I told my client that there was no one-size-fits all answer, but I did know that an active engagement (sorry) in some form of social media would provide insights into his business that are impossible to find anywhere else. Research, reputation management, evaluation, lead generation – the opportunities are as broad or as narrow as required.

Anouchka Burton, Director Broadgate Mainland.

  • Kim

    I find that if a company doesn’t have social media and embrace it, there will be a lot more negativity towards that brand. Say if there is another system failure with not being able to access your bank account, people would be forced to jam phone lines or email. Social media can respond to all these people quickly while a formal response is drawn out for the press. I’ve been in a situation where one crucial online supplier for our business went down for 2 days, including email and phone – social media was the only source where we could find out what was going on. It’s all about reassurance.

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  • Ben Parsons

    > I told my client that there was no one-size-fits all answer…
    So you said “I dunno”, basically?

  • James

    The Sunday Telegraph article that cites declining spend in social media uses the data and the time very selectively. If you consider the particular period that study was taken most FS institutions were in the midst of the very worst press, many were restructuring, bringing in new leadership and suffering from fines, causing two things. 1) a Reduction in media budget everywhere. 2) a freeze on social media until new policies, direction and company wide values were asserted. Given that nearly every institution now wants to regain contact with customers and deliver added value, that study would look very different at the start of 2013.