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What Facebook’s Future Holds for Advisors

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I spent a few very interesting days at the F8 Facebook Developer Conference in San Francisco a couple of weeks ago. The event, as always, was standing room only, attracting developers and entrepreneurs from around the globe. Here are a few observations surrounding the major themes and directions from Facebook that may have a direct impact on financial firms’ business and will undoubtedly influence advisors’ plans for social media.

There’s No Killing the Messenger

Facebook is serious about messaging. And I mean serious. They observe that the number of native text messages has capped out and stopped growing, but the rate of messaging via apps has exploded. Facebook spent a lot of time (even in the keynote session) talking about the importance of its Messenger app to Facebook’s future. It even indicated that it expects Messenger to overtake Facebook proper as its largest platform. In the developing world, for instance, Facebook is trying to make Messenger a unifying communication platform for any device, an alternative to increasingly expensive texting and IM. 

The takeaway here is that we should expect there to be an increase in demand for support of communication between customers and advisors through messaging platforms.

Many new consumers in our market actually avoid email, preferring instead the immediacy and intimacy of texts and messages. In Don Tapscott’s book, Growing Up Digital, he interviews a number of successful young entrepreneurs and business owners who never use email and consider it old technology. We as an industry need to pay attention to that.

Three proof points made it evident to me that messaging was core to Facebook’s strategy:

1) Facebook has transitioned all chat and messaging functions within Facebook into Messenger. It’s now the de facto app for messaging for any Facebook user.

2) Facebook has rolled out 40 new apps for Messenger recently, along with a software development kit to make it easier for developers to build apps for it. Facebook even showed an example of using messaging to shop and purchase goods using only the ‘Like’ button. That indicates Facebook has big plans for Messenger beyond just sending messages and emoticons back and forth.

3) WhatsApp and Instagram. Facebook has spent billions to assemble a platform of messaging and social products that appeal to any crowd, and continue to offer these apps in parallel as opposed to converging them. Facebook has invested heavily in a common infrastructure to support all these messaging capabilities so that they scale seamlessly to trillions (yes, trillions) of messages and activities per day.

Facebook Everywhere

Facebook is increasingly providing hooks for third-party applications to take advantage of content or engagement features that are normally only native to Facebook. Of course, Facebook mutually benefits through increased content and insights into user behavior. Think Google’s strategy as an example of being embedded in everything and making use of that data commercially.

Another example of being everywhere is the focus on opening Facebook up as a platform for hosting media. Facebook increased the video upload capacity to 40 minutes, launched an embedded video player and created a one-click method for sharing media on other channels (email, websites, messaging, etc.) Once again, this has the potential to drive an enormous amount of traffic to Facebook, even if users are unaware that they’re using it.

The implications for compliance are clear for this one: Advisors will increasingly be using Facebook (or other social platforms if this trend continues) without even knowing they’re doing it. ‘Liking’ media hosted on Facebook could easily be construed as an endorsement, even if an advisor didn’t actually do it on Facebook or mean to post it on Facebook. Compliance and management platforms already handle access controls for social media functionality on third-party sites, but we’ll need to take a close look at how Facebook is implementing these new, pervasive capabilities and make sure that we continue to provide or lean on dependable guardrails. It’s also intriguing to think about Facebook’s open platform strategy with regards to the well-documented rise of robo-advisors. You can see the potential for third-party apps developed with a blend of social insights and automation in mind. For now though, robo-advisors are, by their very nature, the antithesis of what social networks represent. They are applying a set of heuristics and rules to come up with a prescription for financial services based on someone’s personal information, but it’s not “personal” in the relationship-building, trust-driven, social sense.

Personalized, perhaps – and Facebook can continue to be the data firehose to make advancements there – but the process doesn’t take into account the individual’s sensibilities, preferences and history the way an advisor would. Time will tell if robo-advisors can advance to the point where they take all nuances of the client’s situation, communication, relationships and personality into account. If they do, Facebook’s openness and goal to be connected everywhere could be a major boon to the robo-advisor industry.

Careening Toward Commerce

Facebook wants to become a more full-featured commerce platform and is equipping every part of the platform to do so. If Facebook is successful, we should anticipate more requests from customers for transaction functionality inside Facebook to support their relationship with the firm. Can you imagine completing money transfers or checking account balances on Facebook? With Messenger? Facebook can. You can already message small transfers to a Facebook friend, and that’s just the beginning.

Virtual Reality and ‘Teleportation’

I’m not even kidding on this one. You may have heard that Facebook paid a gazillion dollars (okay, fine, just $2 billion) for a virtual reality company called Oculus and its product called Rift. I had a chance to try out Rift and talk to a few of the developers about what their plans are. As you can imagine, they’re ambitious. 

Oculus technology is already an amazing immersive experience for gaming. The headset allows you to look around you in 360, or up and down, and the scenery changes in real time. In some games it’s so realistic that it’s disorienting.

But the future is even more exciting. From Fort Mason on the far side of San Francisco, I was able to (virtually) stand in the middle of and experience the Facebook campus. I could look around me and follow people walking by and it was completely seamless. Facebook imagines this as the next iteration of the iOS FaceTime application, with implications for virtual personal meetings, teleconferencing, browsing in stores and medical consultations, to name a few. It’s still a ways off, but this real-time virtual immersion will eventually apply to financial services, too.

More imminently, Twitter’s Periscope and Meerkat, the real-time video streaming apps that have exploded onto the scene, are proof that live video support in social media is going to be a reality. One critical question will be whether this kind of content can be archived (Periscope is only available to be replayed for 24 hours after the live stream) and whether we will also need to transcribe what happens in video or VR for discovery purposes. 

Every one of these trends from the F8 conference has the power to improve social media as a channel for engaging with customers and educating the public about financial services, but each also has the potential to erode trust in social media and brands without the right controls, policies and training in place.

As a financial industry, from vendor to advisor, we’ll need to continue to track, research, innovate and provide services with developments like these in mind to ensure that you and your firm are never exposed to undue risk.


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