The Ever-Changing Landscape – Social Media Within the Financial World

March 18, 2015

Since the breakthrough of social networks the way people interact and communicate has changed in an astonishing way. Newly presented numbers in a study on social media show that social networks are estimated to reach 2.55 billion people by the year of 2017. Given the world’s population now stands at more than seven billion people clearly social networks such as Facebook, MySpace, Twitter, Yelp, Flickr, YouTube, LinkedIn and the like are an integrated part of many people’s lives.

The term ‘social media’ was added to Merriam-Webster Collegiate Dictionary in 2011 and is described as: “Forms of electronic communication (as Websites for social networking and micro blogging) through which users create online communities to share information, ideas, personal messages, and other content (as videos).” That the human behaviour concerning communication has changed rapidly because of these new and advanced technological developments is rather mind-blowing. The interaction between people and businesses seems to have a never-ending development curve and the speed with which this is taking place, can sometimes be difficult to manage.

If we compare various industries, the financial market is one of the most recent industries to have entered the social media networks environment. Several years ago large global financial institutions didn’t have any sort of presence in the sphere. The general consensus among people from the industry, with little or no knowledge in the field, would be to not waste any resource on this ‘hot topic’ and rather focus on making money. What has happened in recent years however, is a steady stream of development towards a more social media marketing-friendly approach among not only financial institutions, but also the industry’s market-leading spokespeople. What people have realised is that this is a hot topic that might actually be worth investigating, and importantly it is one in which money can be made. In a world where personality and the moral and ethical aspect of a company is important, these new social platforms can play a vital part in strengthening a company’s position and bring it to life in a way that was not possible before social networks were introduced.

How Well Do You Know Me?

‘To know your customer’ is a phrase that has been used for decades. Not only in the client onboarding sense, but also to understand people’s behaviour and the psychology behind decisions. Social media turns this concept on its head with financial institutions entering a new era of information sharing. Now the customer wants to get to know you. Recently published figures show that nearly one-third of consumers use information from social media networks when evaluating financial institutions. So whether it is a private high-net-worth individual choosing a private bank, an investor looking for IPO representation or an individual wanting to find a pension broker, what is being said about companies in social media will most likely affect the outcome of their decision. This in turn impacts on your business.

Global financial institutions are today increasingly buying into the social media-marketing field. The industry is adapting at an impressive speed with strong results. The aim is to make brands stronger, obtain a larger market share, and to limit the amount of unfavourable information about the company online. Social media networks are, in addition to customer-engagement, also a great way for monitoring brand activity, particularly against competitors.

Moving Forward – Where Are We Heading?

To master social media networks is an art. It is relatively easy for a person to write a blog, post pictures on Instagram or Flickr, create a pinboard on Pinterest or use Twitter. How large global companies who operate in a strict and regulated industry will adapt to this development is very different. This industry is heavily regulated and restrictions within the financial industry make it challenging. There is also the concern about the fine line between commenting on and giving advice based on news, with the latter regarded as more of a risk. That said, it is crucial for global financial institutions to be present on social media networks. If they aren’t they risk missing out on valuable customer information.

What social networks can provide in terms of customer information is something that we have not experienced previously. Customers take primacy and businesses must find new ways to compete for their attention.

That a rather conservative and old-fashioned industry has slowly started to change its mind about social networks is very exciting and also extremely satisfying because it shows that the industry is developing to get closer to its customer. Where this might take us in a few years or even within the next 12 months will be interesting to see, but one thing that is certain is that it will probably surprise us all.

Become a Brickendon Change Leader

What can we help you achieve?