Social media within financial services

The explosion in members of social media sites shows no sign of slowing down and with Twitter now well established and introducing further expansion, the time may soon be with us when all the world’s population will be connected. There is of course quite a moral argument about privacy and the risks that multilateral connectivity can bring, not least the protection of people and their human rights. However, in financial services the opportunities afforded by social media have been less than well recognised and fear prevails in many cases; fear of leaked information and data, and as we have already seen, whistle-blowers utilising social media facilities to damage former employers.

The use of social media for financial services firms appears to be mostly centred on marketing to their customers. Although I have serious doubts of a sustained success if customers find the Banks marketing directly through social media just as irritating as cold calling or junk mail.

The Financial Services Industry has never been held in such low esteem in the eyes of society and so there is a very important task ahead to try and regain its former glory. Trust is easily lost and hard won and with social media there is an opportunity to directly rebuild bridges with customers. However, marketing products and pushing corporate messages and brands is not the way to do it. There is a real need to open up communication channels to listen to customers, rather than simply pushing the corporate message.

Listening is a hard skill understood by many but performed by few. Certainly corporate listening has been virtually non-existent to date. As soon as a complaint or a problem is reported by someone most firms seem to go into defence mode and then either try to dismiss or disregard the problem or worse still place doubt on the credibility of the complainant, rather than working on a satisfactory resolution of the issue for all parties. This is entirely the wrong thing to do if the financial services industry is to recover its ancient philosophy of ‘the customer is always right’ and ‘my word is my bond’.

Social media only works if it is controlled by society that can utilise global connectivity to discuss or present the individual view, which may well create a groundswell of opinion and movement on a revolutionary scale. It does not work if it becomes an Orwellian tool for Big Brother.

Financial services firms would do well to introduce social media policies in their organisation that actually enable employees and customers to provide feedback and where necessary responses or suggestions about areas of business that are problematical or need improvement.

Until recently financial services firms have traditionally kept their business shrouded in mystery and their customers have had to battle to gain a little understanding. However, social networks are the new shields and swords for the customer and firms must beware that the age of transparency and enlightenment is here.