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April 13, 2012 at 10:06 AM
Social media was once an “experimental communication tool used by a few forwardthinking firms” in our industry. Now, on nearly every financial firm’s website you’ll find a trio of little blue boxes somewhere near the bottom. Corporate Insight, a research firm that provides competitive intelligence to financial institutions, released on Thursday a report spotlighting how financial firms have taken that growth and turned it into effective social media strategies.
“Over the past few years, the use of social media by financial services firms has increased exponentially,” Alan Maginn, senior analyst and social media expert at Corporate Insight, said in a statement. “Social media is a critical way for companies to communicate with their clients, prospects and other targeted audiences on a personal level.”
The report examines 90 financial services firms and ranks their Facebook pages, Twitter profiles, proprietary communities and blogs. While most firms that commit to a social media strategy will utilize the Big Three—Facebook, Twitter and LinkedIn—Corporate Insight excluded LinkedIn from its report, as well as Google+ and YouTube.
LinkedIn has an extraordinary membership (150 million members worldwide), but Corporate Insight notes that “there’s very little variance between one firm’s LinkedIn presence and the next.” Furthermore, most interactions are private, making engagement exceedingly difficult to measure accurately. YouTube offers better metrics by which to measure engagement, but the report found engagement tends to be low. The commenting feature is rarely used by fans of financial services channels, and in fact, is often disabled by the firms. Since Google+ allowed firms to create business pages in November 2011, roughly 50% of the firms tracked by Corporate Insight established a business page in their name. However, they appear to have done little more than that. “Until more firms have the chance to establish functioning accounts on this new community, we feel it is premature to grade their efforts,” the report says.
Corporate Insight based its analysis of firms’ social media accounts on audience, content and engagement, but is especially focused on engagement.
“Engagement is truly what sets social media apart from more traditional business-to-consumer communications, and this direct interaction with current and prospective clients is a major benefit of a well-executed social media offering,” Maginn said.
Twitter is tops when it comes to which social media platform to favor, the report found. In 2010, Facebook was slightly more popular, but even though more firms had a Facebook page, the average number of Twitter accounts per firm was outpacing Facebook. By the end of 2011, 92% of the firms tracked by Corporate Insight had a Twitter presence, compared with 88% on Facebook.
The report noted that more conservative sectors of the industry like full-service brokerages and mutual fund companies were more likely to prefer Twitter to Facebook. Corporate Insight suggests this may be due to the compliance burden of reviewing and moderating comments from other users on their Facebook page.
“Social media was reserved for banks and self-directed brokerages, but now it’s made its way to asset managers” and other financial services firms, Maginn told AdvisorOne on Friday.
“The key is having compliance involved when [firms are] developing their social media strategy,” Maginn said. He noted that education is just as important for firms using social media as having the compliance department review posts before they are published.
“Whoever is writing the posts should be informed of what is acceptable and what isn’t,” he said. For example, Morgan Stanley Smith Barney launched a social media pilot program that allowed about a third of its advisors to use social media to publish pre-reviewed posts, Maginn said. In the past month or so, he continued, a much smaller group of advisors have been allowed to write and publish posts without approval.
Technology is also helping firms stay compliant, Maginn said. “There are several firms that allow companies to track and manage what’s going out there.”
