Financial Technology

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June 04, 2013

Social Media Can Mean Big Success for Financial Services Firms



It's not surprising that most companies are putting up some kind of social media presence these days. With stores both online and brick-and-mortar using social media to draw attention to goods and services, and seeing some surprising success involved, that's got a lot of companies taking notice of the social media phenomenon. Some less conventional industries, however, are also taking stock, and right on the list is the financial services field.

Right now, financial services isn't exactly the most highly esteemed. Seventy-four percent of respondents in a recent survey say that management is likely to restrict social networking access over security concerns. Fifty-six percent say management is concerned about what employees will say over social media that may compromise security, even off the clock.

Meanwhile, the study further showed that not only do 77 percent of respondents in that survey want technology that improves productivity, but also 33 percent are willing to spend money on that strictly out of pocket. That's left some looking squarely in social media's direction, security risks aside.

Indeed, social has a lot of potential to boost business, and not just on the promotional front. Customers want to be able to interact with businesses on their own terms, and that means that businesses need a social media presence to ensure that, when the customers want to talk, the businesses will be ready to respond. Not answering a question or providing information when a customer needs it may well ultimately cost a business a customer, and in these days of a slow economy, a lost customer can make all the difference between an operational business and a closed one. The old “business hours” thing doesn't have much resonance with customers any more, especially those customers who happen to be working during “business hours.”

It's not just banks that can improve here, either; other financial services like insurance can get a lot of help from social media, especially since many insurance services are available—or unavailable—based on geography. Social tools can provide quick answers on what's not available at all, and what's simply not available in an area. Sufficient inquiries into a particular product line can also change that product line; get enough people asking about flood insurance, for example, and a smart insurer will get a line prepared to accommodate all those who want to buy in.

Of course, most enterprises can benefit from improved employee interaction and collaboration, as employees use the ability to talk to each other to develop new strategies and product lines depending on conditions on the ground. The employees often know what's most needed or desired before anyone else, so knowing what the employees know is a boost for business.

There are certainly other opportunities here, and opportunities that may be missed if only one aspect of social media—security--is focused on. While certainly, protecting data is of vital importance to financial services firms, it may be time to consider how social media can fit into an operation rather than just how it can compromise an operation. There are too many opportunities at risk of being lost to not do so.



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