Social media use is exploding for financial services firms, just as it is for enterprises across other industries. Despite compliance-oriented hurdles, more and more financial companies are showing a broad-based commitment to adopting social media in ways that produce real business impact. This post was originally written by Tim Walker at Socialware.
Consumers are using social media at a breakneck pace, but the financial services community has not yet caught up with these new social habits. That was a key theme that emerged from today’s LinkedIn Financial Services Summit in New York. Many speakers emphasized that financial services firms need to do a better job of using social technologies to provide the engagement that socially enabled clients now demand.
Throughout the day, industry experts explained how firms are addressing the challenges of social media and seizing the opportunities that it creates. Speakers included LinkedIn executives Mike Gamson and David Hahn, social media pioneerFrank Eliason of Citigroup, and Socialware’s own CEO, Chad Bockius.
5 Social Media Trends that Cannot Be Ignored
One presenter after another emphasized how firms need to understand the dynamics of social media, grasp their impacts on marketing and customer interactions, and then integrate these insights into their business practices.
1. The social revolution is driven by clients. Consumers — especially influential younger ones in the emerging affluent segment — cannot imagine a world that isn’t digital, and they won’t make important financial decisions without doing research on social networks. In this context, the old command-and-control model of marketing, in which firms push out their messages and consumers passively accept them, is no longer viable.
2. Firms must engage in different ways. In his panel comments, Eliason was particularly eloquent on this point, describing most financial firms as “lousy” at having a conversation. Social media, by contrast, is about having a human dialogue, and this forces firms to be more open and to engage in different ways to build trust. Firms can get much closer to customers, he said, by asking what is important to them, and then evolving in response. All of this, he emphasized, can be done in the right way by partnering with regulators — who are still figuring out social media as well.
3. Consumers are making decisions in new ways. Financial services clients no longer rely on single sources for information; now they aggregate information by researching and sharing relevant content among their friends and connections. LinkedIn has enabled this process in several important ways, for instance by making it easy for firms to share content through Company Pages. They have also acquired a trove of business content (more than 9 million pieces of it) through last week’s acquisition of Slideshare.
4. Pervasively mobile, ready or not. LinkedIn has also made a major splash with its recently released iPad app. As Hahn pointed out, LinkedIn has had more downloads for that app than the entire circulation of The Economist. By looking at usage patterns, they are also finding out that LinkedIn members use iPads and desktops for different purposes. It’s clear that firms are paying attention to this, too: several senior marketers talked about how mobile usage is central to their social strategies.
5. “It is not about social business, it is about business.” That was a key point that Bockius made on the panel pictured above, “Affluent Investors: Online and Looking for Guidance.” He was joined by executives from Charles Schwab, BlackRock, and OppenheimerFunds. The four of them talked about how social media improves firms’ abilities to engage clients — affluent ones, especially. All three of the financial firms represented are using social media to listen to even the most sophisticated investors and connect with them using highly relevant content, including video.
The Social Revolution in Financial Services Is Just Beginning
In his panel comments, Bockius encouraged his listeners to avoid the temptation to define their solution for social business before actually defining their social strategy. He emphasized that the entire industry is still in the early going when it comes to social media, and there is still much to learn about how brands, advisors, and other employees can best build relationships in this new environment.
For more information on how financial firms and their advisors are using LinkedIn and other social media, see our post summarizing LinkedIn’s latest research.