It’s been nearly a year since the Financial Industry Regulatory Authority (FINRA) released guidelines for how the industry can use social media channels. There have been communication rules and regulations for the financial industry for decades, but these guidelines were meant to help adapt these rules for the online world. If you’re a financial services company not yet getting into the pool, now is the time to dive in.
1. Customers, traders and investors are using social media.
If you don’t think there’s an appetite for financial services in the social media world, check out these stats:
- Socialware’s June 2010 Advisor Survey noted that 60% of financial advisors use social networks for business purposes, but 43% of those either do not have or are unsure if a firm policy on social media is in place.
- SeekingAlpha, an investing site, is among the top 500 websites in the country and provides money managers, research analysts, investment bankers and serious individual investors with opinion and analysis on stock picking and portfolio management.
- A survey conducted by the American Bankers Association in August 2010 found that 36% of customers preferred to do their banking over the internet, compared with only 25% saying they preferred branches, and 15% reporting to prefer using ATMs.
2. Reputation management is going social.
Social media has been used by those in financial services effectively to build relationships, communicate and inform audiences. While many in the financial services industry have been wary to jump into Facebook or Twitter, they’ve found that internal communication and education has been an effective entry into social media. While many commercial banks have taken a reputational hit over the last few years, JPMorganChase has been able to help over two million Facebook fans focus on the good the organization is doing by engaging users its Chase Community Giving page.
3. Competitors are already digging in.
If you aren’t online and social, you’re already losing share of voice to companies that are ahead of the game:
- Just a few months ago, Bank of America’s BlackRock launched a blog educating investors on ETF investing.
- Early adopter Vanguard took leaps this year by launching a Twitter handle in the summer and a Facebook program that embraces engagement within regulatory limits later in the year.
- Morningstar is appealing to the individual and institutional investors by providing a series of blogs (“Real Life Finance”) and forums where investors can learn and compare their portfolios right on the Morningstar website.
4. Smartphones and Tablets are on the rise.
In August of last year, American Banker wrote an article about how impactful the tablet will be in banking, and it’s almost impossible to watch TV or Hulu without seeing a commercial for the latest mobile banking offering. Show me a retail bank without a mobile app, and I’ll show you an organization stuck in the Stone Age. In a recent survey by Good Technology to determine what industries are adopting the tablet, financial services soared ahead of the pack dominating over a third of the market (36.8%). While some financial services professionals take tablets into the field as a sales tool, Google and Bloomberg have developed apps for professional or individual investors to keep track of the market.
5. Regulators and IT are catching up.
As more companies are jumping online, regulators and information technology companies are ramping up their own efforts:
- FINRA released its basic guidelines on information dissemination through social media in January 2010, and the industry spent the past year deciphering them.
- DST Systems, an information processes provider, recently launched a new service specifically to manage fund companies’ mountains of paper records and electronic documents.
We should expect more soon, as tactics and technology continue to change how people get and share information about everything from their weekly purchases to their portfolio performance. What are some of your favorite banking and financials tools and how are you using them?
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