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Why is social media listening is important in financial services?

Author's avatar By Expert commentator 01 Feb, 2018
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3 examples demonstrating the benefits of social listening for financial services

In a decade, social media has gone from somewhere we share photos of our cat, rant about politics, get passionate about sport, and learn how to use eyeliner - to a vital part of a company’s marketing strategy (although there are still a lot of cats).

While most industries jumped on board, according to Marketo, the Financial Services Industry (FSI) is still falling short.

This post targets the finance sector, but, the real-life scenarios and advice apply to any industry. Take a look!

Where are Users Talking?

In general, the finance sector does at least have a presence on social media. But, it’s not engaging with its audience, so it’s wasting its time.

74% of consumers use social media to guide their purchasing decisions. With brand marketing often overlooked, we go to our peers for product reviews and recommendations. We want quick, effective, and personalized customer services. We know our own worth and the value of our personal data. We expect – no, we demand that financial institutions listen to us, get to know us, protect us, and reward us.

First things first, use a social listening tool to monitor all media types to find which networks your customers are using.

The arrival of the digital age disrupted the financial services industry and altered the relationship between banks and consumers. No longer can banks interact with their customers through bulletproof glass. Websites, mobile apps, and social media have created new ways to reach customers and engage. Regrettably, the FSI is still finding its feet and engagement is lacking. According to Edelman’s 2016 Trust Barometer, trust in the financial services industry is amongst the fast growing. Yet, the FSI still remains one of the least trusted of those analyzed.

Why does the FSI need a presence on social media?

  • Consumers, prospects, and competitors are there.
  • Brands get mentioned, whether they’re on social or not.
  • Peer marketing is more effective than brand marketing. We believe our friends over brands.
  • It’s the largest focus group in the world where interaction can happen with consumers on a one to one basis.
  • Personalized engagement will move consumers up the value chain - from awareness to brand advocate.

But, Edelman warns that, “trust is too fragile, and today’s financial services climate is too unpredictable for companies to rest on their laurels. The industry needs to continue to be dynamic and double-down on trust building solutions.”

The Financial Services Industry is Waking Up!

In 2016, the FSI began introducing social media into its marketing strategy. Hootsuite’s Social Media Trends Report for Financial Services stated, “In 2017, banks, financial brands, and insurance brands will accelerate their adoption of social channels… to deliver a human touch to the customer experience at scale”.

With 80% of the US population using social media, - it’s about time!

Can the Financial Services Industry Catch Up?

Social media can provide a cornucopia of data about consumers’ behaviour, sentiment, interests, spending history, location, language, and more. A social listening tool will help the FSI track this data and identify actionable insights. Insights that’ll improve product development, customer service, risk management, marketing, and business performance. By becoming more customer-centric, the FSI will increase loyalty, trust, and revenue.

Brand Benefit #1 – Brand Protection: J.P. Morgan Failed to Appreciate the Power of Social Media

The FSI is a highly-regulated industry and yes, using social media can bring on a compliancy headache. Take a painkiller! The Financial Conduct Authority (FCA), published guidelines – The FCA’s supervisory approach to financial promotions in social media. Large glass of water, and swallow.

Ignoring social media won’t make it go away. Consumers will talk about a brand whether it’s there or not. If consumers aren’t happy, they tell the world via social media. If a negative story hits the press, it’s shared all over social. If the FSI isn’t there, isn’t listening, how will it know when to jump in and protect its brand?

J.P. Morgan (@jpmorgan) has 345K Twitter followers. It shares financial advice, sponsorship news, and it promotes its brand. It educates, listens, and engages with its followers. Bravo!

But this wasn’t always the case. Realizing the importance of using social media, J.P. Morgan started using Twitter in 2013. Unfortunately, it failed to appreciate its power.

It launched a Q&A on Twitter, “What career advice would you ask a leading exec at a global firm?”, with the hashtag #AskJPM. The hashtag went viral, yay! But the tweeted questions weren’t from people seeking employment advice. Instead, they referenced a recent court case in which J.P. Morgan was fined $920M.

Admirable that the bank jumped straight into social media in such a bold way. But doing so without a crisis communication strategy prepared, was foolhardy.

First things first, keep track of mentions with social listening. Create alerts so you know the instant trouble starts. Choose keyword alerts that are industry appropriate. The FSI could choose terms such as ‘fraud’, money laundering’, etc.

Brand Benefit #2 – Consumer Insights: Tata Capital Targets Couples Looking to Tie the Knot

Customer insights identify consumer behavior, brand sentiment, trending industry news, customer needs, spending history, product pain points, location, gender, and more. This data enables personalized messaging and offers that target chosen customer segments. Let’s be honest, we’re no longer surprised when Amazon pops up an ad with the boots of our dreams, or Netflix suggests the perfect Friday night movie.

Tata Capital recently launched its Wedding Loans campaign. It uses customer segmentation to find its target audience. Blanket offers to all customers shows that individuals aren’t important to a brand. Customers receiving messaging about wedding loans when they’ve been married for 20 years, would soon lose respect for Tata Capital.

The financial services industry has access to a mass of transactional data; traditional business intelligence focused on historical data. Combine this with the data found with a social media analytics platform, including countries, occupations, languages, interests, genders. It's then possible to identify consumer behavior that was previously ignored or considered irrelevant.

Brand Benefit #3 – Customer Services: 12 Months Later, Barclay Bank was ready to Start Helping

We’re online 24/7 – talking to our mates, watching movies, spending money, looking for support. If the FSI doesn’t match this with 24/7 customer care on social networks, it’s ignoring our needs. 60% of company mentions happen out of office hours. Ouch!

It’s not just about winning customers, it’s about keeping them.

Providing good customer service that complies with banking regulations and operates on social media in the public eye, is not always easy. Planning is essential, because of the need to remain compliant. You won’t receive promos because of that #FridayFeeling, interest rates won’t drop because the sun’s out.

Barclay Bank prepared for 12 months before launching its Twitter account in 2010. It listened to its followers and responded quickly and with a human voice. So successful was it, in 2015, the bank launched a dedicated Twitter account for customer enquiries. @BarclaysUKHelp runs 24/7 and currently has 20K+ followers.

Offering customer service via social media saves time and money for manual workflows. We rarely reach for the phone if we have a problem or complaint, we hit social media – make some noise. When a brand listens, responds, and solves a customer’s problem on social, it’s demonstrating that it cares about its customers. Despite what some may think, using social media for customer services doesn’t make a brand vulnerable, it can increase trust and brand awareness.

How the Financial Services Industry Can Use Social Media to Drive Business Advantage

With consumers in the driver’s seat, where does that leave the FSI in 2017?

Social media, used well, is one of the best places to connect with audiences in innovative, personalized, and educational ways. Delivering engaging and consistent messaging enhances the customer experience. If you want more details on using social listening, you can download this white paper: How the Financial Services Industry Can Use Social Media to Drive Business Advantage.

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By Expert commentator

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