Does Social Media Really Matter for Financial Services?

Financial services are a key aspect of our lives, used every day for one reason or another. So why aren’t social media and finance widely perceived as compatible? Why aren’t financial service brands using social media to its full potential?

Social media has become an integral part of people’s lives: with 82 percent of the world’s population engaged with social networks, social media is now instrumental for brands, whether communicating with mass audiences or engaging on a one-to-one basis. Through social media, people are able to connect with friends and family, keep updated with news, and interact with brands that affect their daily lives.

Which brings us back to financial services.

According to Ian Morgan, Google’s UK Head of Financial Services, almost half the UK adult population used the internet to research or purchase financial services last year. Despite this, financial service institutions are slow to engage on social media, and as such are missing key opportunities to drive business.

As a channel for multidimensional, real-time communication, financial brands can use social media to engage consumers and answer specific queries. With 18 million UK consumers turning to social media for customer service reasons, and 83 percent of consumers who make a complaint on Twitter liking the response from the company, it is obvious why social media is such an important communications channel.

From a company’s perspective, engaging with customers on a one-to-one basis via social media enables a more in-depth understanding of individual customers to develop, increasing personalization and relevancy of products and services.

What Restricts Financial Services from Using Social Media?

One of the main factors financial service institutions face when debating the implementation of social media strategies is the extensive regulation they must comply with. Both the Financial Services Authority (FSA) and the Financial Industry Regulator Authority (FINRA) have expressed a desire to track what regulated brands are saying on social platforms, and how they’re using them.

Compliance with extensive guidelines* from regulators is time consuming, and difficult to understand. Internally systems haven’t yet adapted to the social age, and it often takes time for communications to be approved by rigorous compliance teams, and marketing managers are struggling to overcome compliance issues.

Customers don’t want to use social media to conduct financial service transactions, as these often involve sensitive data. Given the transparency of social media, customers are understandably concerned about protecting their data. This means that even where financial service institutions are using social media, their customers may choose alternative means of communication.

 

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Source : cmswire[dot]com