MakovskyThursday, August 7, 2014
Financial services firms told Makovsky in our recent annual Wall Street Reputation Study they are counting on social media to build bridges, and improve communications and service with consumers, employees and other key stakeholders.
Two thirds (68%) of senior communications, marketing and investor relations executives at financial services firms are so preoccupied with the medium they said it has become more important than other marketing initiatives. They are spending more on it, dedicating more resources to content and distribution and a doubled social media use to combat negative perceptions with external audiences. While these executives are spending more and finding greater uses for social channels, they also confided is us that social media still trailed many traditional marketing and communications channels in effectiveness to improve external perception.
These are interesting findings as the financial industry has been slow to adopt social media because of complex compliance issues. Seven out of ten executives agree that compliance at their company restricts the use and application of social media, while 63% say it is difficult to agree with compliance and attorneys on the use and expansion of social media. Some executives have told us they completely avoid the subject because it creates so much aggravation and frustration.
When it comes to reputation of financial services firms, it is critical to take a deeper look into the impact of social media. Seventy-three percent (73%) of executivesbelieve that social media has improved their company’s reputation, and 72% agreed that using social media allows their companies to provide better customer service and response than other communications channels.
More than seven in 10 (73%) financial services firms use Twitter and Facebook to conduct customer service. Executives agree that some of their company’s top uses for social media includes:
- Distributing thought leadership education content (81%)
- Engaging customers and investors (81%)
- Quantifying sales (77%)
- Carrying on conversations with stakeholders (77%)
However, 56% of executives believe their social media efforts have created more problems than benefits. More than seven out of 10 executives said that controlling the messages on social media is hard to do, with two-thirds (67%) reporting that more negative conversations about their company surfaced on social media versus traditional media.
It is clear there is a pent up demand to use social media, especially in an industry that has bridled its use. Executives were clear that when it comes to financial services social media performs better in certain applications, while it can be a double-edged sword when it comes to building reputation. Given the dogged reputation issues within the financial services industry it will be interesting how social media continues to evolve and how its strategic and skillful practice truly benefits trust.
— Scott Tangney