The Challenges of Using Social Media in financial industry

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Social media is the new gold standard for customer-oriented marketing as customers gain more control over how they allow brands to communicate with them. Messaging can be customized and developed for significantly less than for traditional mediums, and with the right tools, companies can monitor conversations and collect information about those on the other side of the conversations.

Both all two articles list the importance of social media in the financial world, and argue the compliance problems or challenges they may encounter when implementing social media campaigns, it is interesting to read both two articles, they have common ground and differ in some aspects.

The first article emphasizes on the media compliance, while the second article put towards some challenges when using social media in the banking. These challenges, however, mainly be concluded as compliance, social scale and customization problems for most financial institutions.

Many banks see Social media as a tool with three goals — helping to recruit new producers, acquiring clients and staying in touch with existing clients. The social campaigns, if done correctly, the media monitoring can indicate any upcoming risks and mitigate the impact when they do occur. In addition, the goal of the campaign should be to interact and convert them from mere listeners to active participators or even brand advocates.

Banks and financial advisors should need to understand what customers want, help shape their opinions, and ultimately win and retain their business by becoming ingrained in their online consciousness through online chat, Twitter, Facebook, and other forums. Establishing an active and highly visible presence on networking sites allows companies to stay abreast of trends, wants, needs, and concerns and to promptly respond to negative remarks and target communities of prime potential customers.

The questions are:

1. What other challenges do you think when using social media tools for financial products and services?

2. The author thinks that “one-size-fits-all approach “is not working when it comes to social, what is your opinion? Do you have any recommendations for big and small financial firms respectively?

Article links: 

http://www.forbes.com/sites/tomgroenfeldt/2011/09/08/social-media-is-a-key-financial-marketing-tool-for-the-future-just-comply/

http://socialmediatoday.com/sireyeris/2207516/challenges-using-social-media-banking

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3 thoughts on “The Challenges of Using Social Media in financial industry

  1. 1. I think the challenges are privacy and security. Customers want more service other than being educated and informed through social media. But how could a financial firm meet customers need but also in a quite safe way?

    2. I agree that “one-size-fits-all approach “is not working. Different social media have different user demographics. So financial firms should use specific social media to target customers based on the service they provide.

    Big and small financial firms should be careful about how they communicate with customers through their social media. Their social media should have a personality, act as a real person, not only a cold blood Facebook or Twitter account that post information everyday. They should care about your customers, understand their needs, and try to meet those needs.

  2. Privacy, security and compliance are the biggest challenges for financial instututions as the industry is one of the most regulated in the U.S.

  3. I agree with Sisiliu that privacy and security are the main concerns of the financial firms as well as their clients. It continues to be at the forefront of everyone’s mind, especially since the Heartbleed virus recently effected all different types of platforms across all different areas. I think, especially the older generation, tend to be very wary of social media in a financial context mainly because of the security concerns. If these are addressed, I believe more clients will come and a better relationship will develop.

    I also agree that the one-siz-fits all apprach is not appropriate. Different financial instituations have different goals and different client needs that are not all the same. A financial firm needs to take a close look at its clients and goals for social media and consider what type of social media would meet those needs.

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