Social media maturity in financial services
26 December 2011
Social media growth worldwide has forced the financial services providers to focus on this as an important channel to make them heard to the younger population. This has been more so in the wealth management community which felt the need to target newer younger customers. While this looked like an interesting channel, it was also fraught with risk – lack of regulatory clarity as well as confusion on how to use the channel drove the firms to approve of the usage of social media but in a limited manner. A key example is a wealth management firm allowing its advisors to use the social media networks but all the content should be pre-approved. While this enables the advisors to interact with their customers, pre-approved content makes the interaction very limited. Also the intelligent customers can quickly make out that the firms are just sending them advertisements in no time. This is an issue which is relevant for the larger firms who are worried about the litigations if something untoward happens via social media channel. For the smaller firms and individual advisors, there is a tighter control over the social content and it is in this segment that social media has contributed to maximum client impact. IFAs have built successful brands by generating timely and relevant content and engaging on a personal level with their clients. But with the social media policies getting in place in most firms and with the increasing maturity of social media usage, even larger firms are allowing more leeway to the advisors in reaching out to their customers. 2012 will see more and more personalised interaction and credible evidence for effective ROI. Another trend in 2012 will be the emergence of social analytics which will help in effectively measuring the impact of social media using more sophisticated levels than just clicks or likes. Social media monitoring is here to stay due to regulatory requirements and in the next stage of evolution, firms will be able to monitor which advisor is the most effective and what the customers want to hear. This analytical feedback will enable better engagements with the customer and will help in ROI calculations.