Social media can be among the most direct of channels to engage with prospects and customers with content, offers and observations on multiple levels. But within the financial services industry—including asset management companies, banks, brokerages and insurance companies—heavy regulation and a general conservatism have been deterrents to exploring the Wild West of social.
“We all know that social media is a global phenomenon, not just a passing trend,” said Lauren Boyman, director-social media at Morgan Stanley, during a company webinar last month hosted by online publisher FierceFinance.
“But financial services has been slower to adopt it,” she said. “As an industry, we have regulatory obstacles holding us back, in addition to the real-time, fast-paced nature of social media.”
Companies that are venturing into social media are establishing clear guidelines on how to avoid running into trouble with its use. For Morgan Stanley, that means treating a growing library of Twitter posts on thought-leadership like advertising and categorizing them as “static” content, requiring preapproval and closely monitoring their use by financial advisers.
Boyman said a solution for most financial services companies has been to talk about anything but their products and services.
“Firms attempt to build brands by talking about social responsibility or sports sponsorships, for example. As a result, sometimes there are requests or questions that are just left idle, which is worse than not being on social [media] at all,” she said.
Boyman said Morgan Stanley treats LinkedIn differently. Here, professional biographies are initially preapproved but don't require further scrunity for interactive communications with potential customers.
That data, however, is captured and archived for future review—the same way Morgan Stanley manages email, based on its reading of social media compliance guidelines for financial services companies.
Other companies are more aggressive. Last month, JPMorgan Chase & Co. wrapped up a $1 million Facebook sweepstakes giveaway encouraging customers to “like” its Chase Freedom credit card.
American Express Co., whose AmEx OPEN portal provides services for small businesses, also teamed with Google's YouTube video-sharing site to launch a contest encouraging businesses to “tell their stories.” The campaign helps promote AmEx OPEN's Small Business Saturday initiave for shoppers to patronize local businesses the Saturday after Thanksgiving.
And Bank of America is hoping an aggressive Twitter outreach will improve its poor public reputation.
Generally, however, financial services organizations are lagging in social adoption. In BtoB's “2011 Outlook: Marketing Priorities and Plans” survey released earlier this year, only 57.8% of financial services respondents said they have adopted social media marketing, versus 95.2% of advertising companies, 80% of consultancies and 71.6% of technology businesses.
The only vertical that shuns social marketing more is manufacturing, at 48.6%.
Listening to social buzz is key to finding appropriate topics, said Chad Bockius, CEO of Socialware, a social consultancy and software company for the financial services industry, who shared the webinar panel with Boyman.
“If someone is reading a lot about 529 plans for educational investments [or] 401(k) rollovers, the more content you can put out, the better,” Bockius said.
Social communicating in real time by a product specialist or deal team at an investment bank can also be viewed as more secure than email, said Jason McDermott, VP- financial services with NexJ Systems, a CRM software provider for the financial services sector.