Social media and financial services: Time to innovate
28 November 2016
It’s been a busy few weeks for UK financial services companies on social media. First off we had an insurer announcing a new product aimed at first-time buyers that planned to use social media data to offer discounts to low risk drivers. This was launched and then swiftly blocked by the social media platform, stating "clear guidelines" preventing information obtained from their platform being used to make eligibility decisions.
We have also seen how an online bank used social media to keep their customers informed and manage requests following a recent targeted cyber-attack. The bank was active across all their social media channels dealing with high volumes of interactions, and supporting the customer services and PR teams.
Two very different stories that go some way to explain the challenges that the financial services sector faces with social media. On the one hand is a desire to find opportunities to use social media to reach new customers, do business and innovate in the sector. Whereas on the other hand is the challenge of proactively using social media for customer relationship management and brand awareness.
Social media opportunities
Many financial services companies are looking to innovate in the social media sphere; no longer is it just about using social media purely as a communications and marketing tool, it also provides opportunities to deliver services in a completely different way and respond to customer demand.
Examples include a bank who effectively launched a ‘social media branch’ in Turkey, bringing banking and social media together through an app. Customers using the app can manage their bank accounts and transfer money 24/7 to other users via their accounts.
Or how an online payments company and a peer-to-peer homestay app used social media and their digital platform to increase bookings and new user accounts. By entering your location and a friend’s location the tool suggests a halfway point to meet, properties to stay in, and naturally provides the opportunity to share on social media. By the end of the campaign 18,539 new users signed up and, 64,239 nights were booked.
Influencer marketing and financial services
I’ve been using a tool that allows users to create leaderboards based on individual’s social media accounts to rank them as influencers in their sector. In my case I host the LGBTI+ Global Social Media Powerlist, with the goal of increasing visibility of LGBTI+ leaders and leveraging difference in business, particularly financial services.
Firms are also exploring how tools such as this can be used to increase awareness, promote their brand and reach new customers. A UK bank – who specialises in ethical and sustainable banking - set out to use a leaderboard in the sustainability community to raise brand awareness, drive traffic to the blog, increase followers and engagement, and create new business opportunities. As well as promoting the list, they have also run engagement campaigns targeted at influencers on the list and their followers.
The content created by influencers also provided further opportunities to drive prospects to their microsite - such as by collating answers in blog posts - and provided the marketing team with valuable insights into trends and current thinking around key topics.
Getting social media engagement right
One of the problems that financial services companies have with social media is controlling the message and brand image. As with any other highly regulated industry, using social media has compliance implications with strict guidelines on what can and cannot be said. This may lead some companies to limit their activity to standard predefined messaging, removing any opportunities for genuine engagement with influencers, followers and potential customers.
I’m sure that there are many compliance and legal teams that would rather their company just didn’t do social media, and therefore avoid the headache that it can cause. However, the problem with just not doing it is that financial service companies cannot control what other people are saying about them on social media. It’s easy for someone to slap a hashtag in front of a company name and suddenly everyone is adding their two pennies worth. Therefore, in my view, it makes much better sense to get a robust social media and engagement strategy in place, and take control of the messaging and brand.
To get engagement right and reap the rewards that social media can offer, I believe that social media strategies should not only be developed alongside compliance and legal teams but there should be an on-going partnership between all parties.
Too often compliance and legal are viewed as obstructive, preventing marketing and communication teams from interacting in an authentic way on social media. A common criticism of many companies is that they do not respond quickly to customer requests and complaints. I imagine that in many cases this is because those who look after digital channels are waiting to be told what they can say. Social media managers need to be able to respond quickly to online interactions - be they requests for information, complaints or positive comments - customers expect real-time responses.
However, when there is a willingness to work together - where compliance or legal understand the need to provide answers quickly, and to respond with creative solutions rather than putting up barriers to engagement - financial services companies have an opportunity to deliver excellent customer service and differentiate themselves from the rest.
Those companies that get it right have systems in place that speed up this process. These include:
- A governance structure for all social media programmes.
- Open lines of communication between different departments such as compliance and marketing.
- Comprehensive social media policies that educate and help employees respond and engage in real-time and safely.
- Social media monitoring that ensure that companies know when they’re being talked about, and can help identify trends and opportunities for engagement and lead generation.
- Innovation programmes that explore ways to integrate products and services with social media, and opportunities for new product development.
Responding to customers on social media in a timely and relevant way has also been proven to increase both customer satisfaction and revenue. A study conducted by Twitter shows a direct correlation between responsiveness and willingness to spend.
Twitter looked at data from the airline, restaurant and telecoms industries, and how companies responded to customer interactions, their customer satisfaction scores and revenue potential.
In the study Twitter found that “when a customer Tweets at a business and receives a response, that customer is willing to spend 3–20% more on an average priced item from that business in the future”.
Responsiveness appears to drive revenue. Twitter also found that in the telcoms industry, customers are willing to pay $17 more per month for a phone plan if they receive a reply within four minutes, but are only willing to pay $3.52 more if they have to wait over 20 minutes.
Those in financial services might expect to replicate similar results if they can put into place systems that allow a rapid response to customer interactions. Consider too how inexpensive social media is compared to responding via a help desk.
Using social media in a crisis
Furthermore, social media can be part of the company’s crisis incident management and disaster recovery planning. When phone lines are permanently engaged, websites are down and customers are desperate for reassurance that their financial and personal data is safe, they often turn to social media.
Managing the brand’s reputation is critical and therefore social media strategies should be clearly defined in a crisis. Tools such as social media monitoring software can be invaluable for this, helping companies identify content that relates to them and then take rapid steps to diffuse negative situations.
There are plenty of solutions available that can be used to monitor interactions on social media, allowing companies to respond quickly and proactively. Tools such as PwC’s Social Observatory cut through the high volumes of social media traffic to enable companies to identify trends and customer sentiment, identify and target influencers, and benchmark performance against competitors and other players.
Artificial Intelligence, social media and customer care
High volumes of interactions on social media channels from customers have resulted in companies employing large social media teams to provide a responsive service. But can any of this be automated? Certainly some companies are exploring the potential for combining artificial intelligence (AI) solutions with human interactions.
Examples include a European airline who employ a 235 strong social media team and deal with approximately 15,000 social interactions per week*. The company has added a chatbot to their social channel, automating updates about checking in and flight delays. It can also provide customers with a copy of their boarding pass.
The customer service team also use AI to answer questions on social media using a machine learning system that monitors the company’s social media interactions. This system learns appropriate answers to customer questions and is continually refining its responses based on how the human users edit them. This solution has increased the responsiveness of the airlines’ social media channels by 20%.
Financial services companies cannot afford to overlook social media because it is challenging. Customers are on social media. They want intuitive social media solutions from the companies they use. They want - and will - use social media to communicate, and therefore companies must be prepared to communicate on these channels too.
In turn financial services and other companies can reap the benefits of social media; raising brand awareness, building customer loyalty, reaching new customers and innovating within the sector. If you don’t, someone else will!