WHITE PAPER Financial Services 4 Social Media Strategies for Business Success Financial Services 4 Social Media Strategies for Business Success
The financial services industry has reached a crucial crossroad in its adoption and use of social media for the enterprise. For banks, wealth management firms, and insurance companies, the question to answer is no longer “Should we use social media?” It’s “How do we use social media to achieve our business objectives?”
There is no slowing down the momentum of social Clearly your customers want to connect with you using media. Across every industry, social media has given social media. According to NM Incite, a joint project of customers unprecedented influence and control. The Nielsen and McKinsey, nearly half of all social media world of banking and finance is no different, despite users have used social media for customer service. the cautionary approach taken by many organizations There is a clear market mandate for the finance sector toward social media due to regulatory guidelines and to embrace social media in order to listen to what compliance concerns. their customers are saying, to provide stellar customer service, to gain valuable insight into customer behavior, Consumers of every age—from Millennials to Baby and to promote and protect their brand. But social Boomers—eagerly take to social media networks to media is not just marketing’s job anymore. Social share their experiences, both negative and positive, media today requires integration of at least Marketing, in dealing with your organization, products, and Compliance, IT, Sales, and Customer Service. All services. They seek out information on social media business units need to be on board because everyone networks before making decisions about which financial has an important role to play. institutions to do business with. These consumers are shaping perceptions of your brand through their This paper outlines the four strategies you must put in comments, posts, and likes—whether you know it or place across your organization for social media to make not. a measurable contribution to your business success, while ensuring the security and compliance of your In addition, customers of banks and other financial efforts. To execute these strategies you need to have services organizations demand convenience. They the right social relationship platform. The time to act is expect service when and where they want it, using the now; the socially focused financial services institution is devices and channels of their choice, which often means inevitable, according to Deloitte, and companies that social media and mobile. If they send a tweet to your take social media action can gain business advantage. bank asking for help, they expect a quick response; if they post a comment on your organization’s Facebook page, they expect it to be acknowledged. Edison Research found that 32 percent of respondents who have ever sought social customer service expect a company reply within 30 minutes, and that 42 percent expect a response within 60 minutes.
FINANCIAL SERVICES: 4 SOCIAL MEDIA STRATEGIES FOR BUSINESS SUCCESS 2 Don’t Let Compliance Hold Fortunately, security and compliance concerns are no longer reasons to avoid social media. Today, large You Back and small companies in the finance industry are using robust social relationship platforms to mitigate risks, By now, most financial enterprises have at least ensure compliance, and confidently engage in social experimented to some degree with social media. More marketing, selling, and customer service. For example, advanced organizations are already using social media Hootsuite has built-in compliance features to prevent on a regular basis as an integrated component of their your company from posting social media messages that communications efforts. Yet others in the finance sector could violate regulatory guidelines, along with security have held back from social media. These organizations features to maintain control of your corporate social may understand and desire the business benefits social media accounts. A social relationship platform isn’t media can offer, but are afraid of making mistakes that simply a convenient way to manage social media, it’s the could damage their reputation or result in negative foundation of your ability to execute an effective and financial consequences. It’s no surprise that security and compliant internal and external social media strategy. compliance top a financial organization’s list of fears.
In the financial services industry, FINRA conducts Locate Your Organization on regulatory audits to examine a company’s social media the Social Media Maturity accounts and policies for communicating on social media channels. The association’s auditors check who is Scale authorized to post on social media and what your firm Social media adoption and acceptance vary greatly from is doing to ensure compliance. Each regulatory body one financial services company to another. The first task has its own requirements—SEC, FSA, IIROC, Sarbanes- before executing a social media strategy is to take stock Oxley, and others. Executives are also concerned of where you are today on the social media maturity about the security of social media accounts and leaking scale. Then you can understand where you need to get confidential information. How does a financial services to in order to achieve your business goals. company create the perfect balance between giving consumers what they want and meeting regulatory expectations?
Where is Your Company on the Social Media Maturity Scale?
Social Advocate Social Teams Social Organization
Individual control Departmental control Centralized control for entire enterprise
Siloed efforts Siloed efforts Integrated social media strategy
Little or no budget Challenging to justify budget Budget supported by data and measurable ROI
Outward facing social Outward facing social media Outward facing social media along with internal media social collaboration
Focus on building social Focus on building social Focus on achieving business objectives media presence media presence
Ad hoc tools Ad hoc tools or social Social relationship platform relationship platform
FINANCIAL SERVICES: 4 SOCIAL MEDIA STRATEGIES FOR BUSINESS SUCCESS 3 Four Social Media Strategies initiative involving Marketing, Sales, Customer Service, Human Resources, Compliance, and IT. Why all for Business Success these departments? Because each department must contribute to the processes you need to be compliant To achieve social success build a foundation based on and successful with social media, and each department these four strategies: can use social media data to improve efficiencies and 1. Audit and Streamline Your Social achieve business objectives. Media Presence Marketing can listen and engage. Sales can elevate Start by auditing and taking control of your existing their status to be trusted partners to prospects and social media presence. It may be larger and more customers. Customer Service can respond in fast, fragmented than you realized. According to the convenient ways to inquiries. Human Resources can analyst firmAltimeter , the average enterprise has recruit. Compliance can sanction social media activities. 178 owned social media accounts across at least 13 IT can ensure your social relationship platform fits within different departments. Social media often starts at your applications ecosystem and will scale as grow the business unit level as divisions create their own across teams, departments and regions. social media presence. In addition, new and existing employees open new social media accounts all the It’s important to note that your Compliance and IT teams time. If your organization has grown through mergers belong at the table from the start. Their voices and and acquisitions, there could be multiple social media recommendations, as well as their adoption and use of accounts operating under different brand names. social media, are as essential as those of your front- line social media practitioners who have specific and Most companies don’t keep an overall inventory of relevant use-case experience. customer-facing profiles, and security measures may vary department to department. All too often IT is called You may not be able to fully formulate your outward- on to authorize or deauthorize users and accounts, facing social media strategy until you spend time putting an undue burden on an already overworked listening on social networks and evaluating what you department. These are just a few of the reasons you hear. What is being said about your brand, industry, and need centralized ownership of social media profiles. competitors? Who is talking? Where are they talking? Ownership includes centralized account provisioning, Why are certain industry topics trending? a multi-layered permission system for publishing, For instance, a retail bank may want to tag references checks for regulatory compliance, and archival of public to interest rates, fraud protection, online banking, and internal social messaging to meet retention and and customer service. A social relationship platform retrieval requirements for your firm. Archiving of social gives you the ability to filter through and categorize messaging, if performed manually, can be extremely any volume of incoming messages. You will be able resource intensive. You can save time and resources by to identify opportunities for engaging your customers working with a vendor, such as Hootsuite, that provides and the market through social media. Here’s another an automated service. example: A bank may discover general customer Until you have this foundational strategy in place, your dissatisfaction with the banking capabilities offered organization faces security risks and potential violations through social media, and the bank could launch an of industry regulations. Your brand and reputation are initiative to stand out from competitors in this area. also vulnerable if users post inappropriate messages on Chances are, if you have any social media presence at social networks or customers make negative comments all, consumers are directing inquiries and comments you don’t know about or respond to appropriately. your way. You should formalize processes for receiving, 2. Establish a Unified Social Strategy sharing, and responding to customer messages. Across Your Organization Should a salesperson take it? Is it a customer service question? Does it require a subject matter expert, or YYou’ve taken control of your social media presence. can a marketing associate formulate an appropriate Now you must establish a unified social media strategy response? Consumers don’t expect a generic response, across your organization. This is a company-wide
FINANCIAL SERVICES: 4 SOCIAL MEDIA STRATEGIES FOR BUSINESS SUCCESS 4 but instead a personalized, meaningful response. You 4. Educate and Empower Your Team can deliver one if you have integrated your organization An educated workforce well-trained to be social media around social media and put the appropriate processes ambassadors is not just a competitive necessity but and workflows in place. With every relevant and a regulatory one as well. To develop policies and timely response your team delivers you increased guidelines for social media usage and compliance, opportunities to earn new customers and build loyalty assemble a cross-functional team that meets the needs from existing customers. of all stakeholders from every department. Part of the 3. Identify Relevant Metrics and Apply educational component should focus on workflow Social Analytics processes around permissions and approvals, while another part should focus on using social media All business initiatives should be directly related effectively to achieve business goals. to business goals. Social media is no exception. For example, if one of your organization’s business For example, you will want to train users on how to goals is to increase the dollar value delivered from avoid setting your organization up for criticism and each customer, one of your social media objectives attacks from consumers. There have been a number might be to educate customers on different types of high-profile cases where financial institutions have of loans. An insurance carrier that wants to recruit hurt their own brands through misguided attempts to more independent brokers might use social media to use social media. Most financial industry professionals converse with brokers about best practices for working remember the ill-fated #AskJPM hashtag. JP Morgan with multiple carriers. A wealth management firm might Chase tried to host a Twitter discussion with vice use social media to educate consumers on the different chairman James B. Lee Jr., but got bombarded with types of investment products or to provide information vitriol and negative comments from unhappy customers. on saving for college. Any financial services firm would An educated team could have avoided such a fiasco. want to improve customer service by responding faster to customer inquiries coming in through social media It’s likely your team of social media users will continue channels. These are all viable business goals that can be to grow, requiring you to stay on top of ongoing training supported and measured through social media. efforts. External certification programs such as the one offered by theS.I. Newhouse School of Public Focus on developing social media objectives that serve Communications and Hootsuite can provide a formal your business goals. Then, you can assign metrics and framework for social media training. Certification measure the success of your social efforts. Naturally programs make it easier to keep all employees up-to- you will want to track your reach and brand visibility date on their social media skills and help your firm scale by counting likes, mentions, shares, retweets, follows, up its social activities more rapidly. and other social media metrics. However, true social analytics are tied to business goals, such as revenue, customer loyalty, and other strategic targets. Important To learn more and enroll your team customer care metrics through social media might be in the Newhouse-Hootsuite Advanced response times, time to resolution, and number of case Social Media Strategy Certification, visit resolutions through a specific social channel. newhouse.hootsuite.com A social relationship platform gives you end-to-end tracking of your social media audience—where they came from, what they click forward to, what interests Remember that social media policy is not about them, and what doesn’t. You will learn what messages censorship. It’s about defining the parameters in which resonate with your audience and how visitors interact you can succeed. Employees will embrace coherent, with your content. You will gain intelligence to help you common-sense guidelines, whereas they will reject optimize programs, hone your message, and invest in confusion and inconsistency. Even top executives need social media promotions that deliver the highest return. and want to be trained. Educated executives can be high-profile leaders of internal social initiatives and can also be your best brand ambassadors on external social media.
FINANCIAL SERVICES: 4 SOCIAL MEDIA STRATEGIES FOR BUSINESS SUCCESS 5 Banking Wealth Management
According to Gallup, customers that use social media to Many wealth management firms have been reluctant to interact with their bank are 12% more likely to be mass use social media because of the liability and reputational affluent ($100K to less than $1M in investible assets) risks stemming from erroneous or inappropriate and 18% more likely to be emerging affluent (age 35 or postings. This hesitancy has slowed the learning curve under with incomes over $75K/year) than typical bank of some wealth management advisors. With younger customers. They are also more likely to hold positive advisors slowly replacing retiring industry veterans—and attitudes toward their banks. In other words, social younger clients entering the investing world—social media users are likely to be valuable bank customers. media is making inroads as a legitimate sales and communication channel within the profession. Banks that understand this phenomenon are beginning to progress beyond using social media as a customer A recent survey by Accenture revealed an erosion of engagement tool. They are starting to collect social investor trust in financial advisors. The survey also media data for marketing insights such as what uncovered opportunity for financial advisors, who can products and services to offer and which social media improve relationships using social platforms to forge networks to use for targeted advertising. Banks can deeper, stronger relationships with clients and recruit listen to customers’ social media posts to learn about new clients. Forty percent of financial advisors said they product needs and preferences, even to pick up on had acquired new clients through Facebook, 25 percent buying signals. Sentiment analysis, content tracking, and through LinkedIn, and 21 percent through Twitter. The crowdsourcing can turn everyday engagement activities same survey found that internal social networks helped into actionable intelligence. To achieve this level of social financial advisors connect with in-house experts to media maturity requires a social relationship platform to answer complex customer questions. collect and analyze the data, as well as to produce the necessary insights to support decision making. The objective for asset managers and financial advisors now is developing an effective and sustainable strategy In addition to social marketing and selling, social to reap the business benefits of social media. To date, customer service is a natural fit for banks. Research by the extent most wealth management firms have gone NM Incite indicates that social media is the most cost- to is using only basic tools to monitor what employees effective way to conduct customer service. Customer are saying on social media in order to avoid compliance care through social media costs less than $1 per issues. However, wealth management firms that haven’t interaction, compared to $6 for telephone and $2.50- fully embraced social media run the risk of losing their $5.00 for email per interaction. The key is to implement relevance in a world where brand image and reputation effective customer care processes and have in place greatly depend on client-generated reviews and content. a social relationship platform to ensure messages are What’s more, the lack of online visibility can equate to routed and responded to in an appropriate and timely missed opportunities for turning negative perceptions manner. or service issues into business wins and loyal clients.
With proactive planning and a strong social media Customer Care Costs foundation, as well as a wise investment in a social relationship platform, wealth management firms can minimize online risk, better nurture client relationships, build credibility, and secure a sustainable competitive advantage.
Social Media Email Phone $1 $5 $6
FINANCIAL SERVICES: 4 SOCIAL MEDIA STRATEGIES FOR BUSINESS SUCCESS 6 Insurance Embrace Social Media with
The insurance industry is ripe for social marketing and Confidence selling. Brand awareness and perception are important By implementing these four social media strategies, you drivers of insurance buying, and social media offers can establish a secure, compliant foundation for using a multitude of brand-building opportunities for an social media to meet business objectives and gain an insurance firm; for example, educating consumers about advantage in the financial services marketplace. As you teen driving, identity theft, fire safety, healthy living, or begin assessing your current social media presence any other of a multitude of topics related to insurance and efforts, keep in mind that social media’s role in your needs. financial services organization is destined to grow and At the individual agent level, the ability to filter locally contribute to your core business goals. With a common and listen to what customers are saying on social media social relationship platform in place, you can confidently can drive significant benefits in terms of fostering move forward and scale up your efforts. customer loyalty and acquiring potential leads. Think of all the information consumers publish on social networks: a marriage announcement, the birth of a new baby, the purchase of a new home, questions about buying a car, and many more. All of these important events can be related to insurance needs. The agent that knows about them can reach out with curated content from Marketing to deliver the right message at the right time using social media. Moreover, the ability to geo-target messages to specific towns or regions helps enables agents fine-tune messaging and filters through the large volume of social media messages. In addition to geography, targeting messages by demographics such as age, gender, relationship status, and other factors heightens relevance and promotes a personal touch.
Strengthening your brand and marketing products are not the only uses of social media in the insurance industry. According to the National Association of Insurance Commissioners, insurance companies are turning to social media networks to communicate with insured customers about claims and other pertinent information following a catastrophe.
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