Financial Services: The Last Untapped Social Media Opportunity
Peter Panda

One of the last untouched social media territories is financial services. Between tough regulations, a conservative culture and a perception that social media does not reach the target audience of high net worth individuals, it has lagged well behind other sectors in using these means to connect with their clients.

Having worked in financial services for seven years, I know the guardrails: compliance restricts any element of promise in returns or performance and the company is responsible for any comments or recommendations that could show up on a forum or community the firm sponsors.

The result has been a general shut down of social media – a study by Swiss consulting firm use words like “clumsy,” “amateurish”, “hibernation” and “tokenism” to describe banks and social media.

For financial service firms, it’s just not been worth the risk. And they could not be more wrong.

There has never been a better time for information sharing about what is clearly one of the most important issues facing all Americans: how they are going to prepare themselves financially for a very cloudy future. The ability to educate consumers and share best practices will be essential to helping people through difficult times and readying their finances as they go through the financial stages of life.

The high net worth folks have figured this out. Their use of social media is as high or higher than other groups, although the amount of time they spend on Facebook may be less than other groups (time is money, after all).

The Financial Industry Regulatory Authority (FINRA) has issued its regulations about social media and they leave the door wide open for financial services firms that are willing to take on this challenge.

Here are some recommendations for financial services firms that want to use social media to prosper:

  • Build a community for advisors: Create a password-restricted site full of tools, links and ideas brokers can use to provide more value to their clients and, in turn, find more value from the firm that delivers this. This capability is more valuable than just about any other means in social media and it can be easier to control than a community created for consumers.
  • Train employees to use social media to reach clients on a personal level: FINRA makes a distinction between business communications and personal ones. Employees can use social media portals to enhance their relationships with clients without making recommendations or crossing the business line. Financial services is all about relationships and this is the ultimate way to build them.
  • Hire people who know how to use social media and help them understand industry regulations: Most companies take the other approach–they try to teach legal and compliance employees about social media. The result has been a reluctance to use the tools, even as regulations have eased.
  • Employ the most sophisticated social media monitoring tools: These tools can give firms access to very deep knowledge about clients; they can even be used to anticipate problems.
  • Use Twitter: The most versatile of the portals, it can be used to monitor customer service issues, reach media and your own clients.
  • Get ready for the mobile future: Whatever you can learn now will pay off when everything moves to mobile devices, a future that seemed far off until the tipping point of smart phones and tablets hit at the end of 2011. If you’re still struggling to use wired devices, the wireless future will be even harder to handle.
Peter Panda

Pioneering social media panda bear Tagawa “Peter” Panda was born on a Chinese game reserve in 1969. He emigrated to the United States in 1987 speaking no English, with only the fur on his back and $97 stored in a Jansport fanny-pack wrapped around his waist.

In 2003 while searching for food on the campus of Washington University, he discovered a computer lab where he would ultimately teach himself web development, graphic design, and immerse himself into the growing digital media evolution that was erupting at the time.

With his trademark surly demeanor developed during beatings on his boat ride from China to the U.S., as well as having a penchant for eating vast quantities of bamboo, and enjoying Scotch and cigars, Peter is broadly recognized for coining the phrase “social media” in 2004. He joined Elasticity in late 2009 as the agency’s director of social media strategy and wildlife relations. Friend him on Facebook here.

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