Financial Social Media: Will it Live Up to its Promise?

The financial services industry is recognizing the power of financial social media. Of course, with guidance from FINRA, the industry’s regulatory body.

The primary usage for financial social media has been in the area of customer engagement and acquisition; however, many firms are going beyond that believing that there is promise in other areas as well. Financial social media is becoming useful in:

Customer care. The bread and butter of financial social media has been customer service, and that aspect is seeing an opportunity in the social space. Twitter can be a outlet for customer concerns and questions, and a many financial services companies are listening and proactively helping these clients. Wells Fargo and Citibank have been leaders here in proactive outreach customer service strategies via Twitter.

Online sales. Recommendations from family and friends play a key role in how consumers start the process of choosing a financial services firm. Financial social media has a logical role here as it is about sharing experiences with family, friends and others. Financial social media enables customer ratings and reviews instantaneously and a groundswell of favorable ratings could result in a phone call that leads to opening a new account and an increase in assets under management.

New product development and upgrades. Firms are discovering that they can gain a lot of customer information and market intelligence by deploying financial social media activities. Who better to ask about new product development or product enhancements than existing customers who own and use the product? Think of the amount of market research that can be obtained from tapping into social communities via a financial social media outreach program.

Community support. Financial services firms are coming to recognize that one of the most important words in the phrase “financial social media” is “social.” While financial decisions may be a personal activity, the path to these decisions is often created by social interaction with segments like investors or small businesses looking to one another for peer comparisons and best practice sharing. As a part of their financial social media programs, a number of firms are using closed communities to drive service utilization and segment engagement by getting customers to interact with each other in the social space.

Great steps have been made within the realm of financial social media. Firms considering financial social media are advised that the most important thing to do is to adopt policies before using social media.

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