I had the privilege of joining Shel Holtz and Neville Hobson the week of February 11 on their show for a discussion on B2B social media. We’ve continued to shape communications around social media in financial services at the exchange and being a part of For Immediate Release was an honor. I’ve been a long-time listener of the program and talking about all that we have accomplished during the past six years was a great experience.
There continues to be momentum in the use of social media in the financial services industry. Last week, I wrote about what is happening in the futures industry and the impact of social media, but a host of other changes have shown that the industry is becoming an industry that understands the transition. While the industry has often been branded as a laggard in social media, there is growing evidence that firms have the people and processes in place to integrate the right tools. Here are a few noteworthy items:
Two weeks ago we saw Goldman Sachs join Twitter, a long awaited launch;
StockTwits and PRN Newswire recently joined forces to integrate news into the social media stream;
Econsultancy last month wrote about the use of LinkedIn among financial services firms;
The Financial Times reported in April how more financial services firms are embracing social media; and,
So what’s changed? First, social media has received broad acceptance among many retail and consumer brands already. We are seeing the financial industry study these habits and follow what has worked and what has not. Second, having the internal processes in place and compliance matters put into order have become more clear. It was only a matter of time that this would happen, and as more firms use social media we are seeing the result of common ground in this area. Third, as journalists use social media more they are effectively helping to pull communicators into the mix (if only to listen at first). Finally, communicators are becoming more comfortable with the social tools and understanding how they are used.
I believe we will continue to see growth in social media use among the financial services industry. In particular, I think the the area of evaluation will be of key importance as firms try to make sense of the qualitative and quantitative information online. I also believe there will be more emphasis put into CRM and social enterprise tools by financial firms as they try to build revenue streams from the social streams. No matter what direction financial firms head, the adoption of these tools will clearly benefit many industries as more investments in people and resources will be made.
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I spoke last week at the first LetsTalkFX conference on social media for financial services. You can view my presentation at SlideShare. Two observations from the presenations I heard and the questions from the audience focused on two areas: What tools to use and dealing with compliance.
- There was a healthy debate and discussion on the tools to use. Is Facebook just for friends? How do I deal with so many anonymous Twitter accounts that want to talk with me? How do I find the time to manage all of these platforms? Is LinkedIn really a good platform to have discussions? Can I use just one? It was very clear that everyone was looking for the “sliver bullet” using social media rather than focusing on finding the right tool. That’s not an easy task and finding the right tools to use can make all the difference.
- The other focus was on the idea of dealing with internal compliance and and ensuring they are met. Everyone agrees that this is a key part of success, but the challenge remains getting legal and the risk teams on the same page.
The hard part in presenting at events is that everyone is looking to you for answers. While I can give ideas of what works and what hasn’t for us, the bottom line is that a lot of what happens is built on the content provided and the engagement and effort that goes into it. We do a lot in social and continue to experiment (e.g., we launched our Pinterest page this week). In addition, we benchmark against a number of other institutions and people who don’t necessarily work in our industry.
One of the reports I referenced in my presentation was from Cicero Consulting and their latest results on the financial services industry and social media. It’s worth reading if you are interested in knowing more about the opportunities that exist and the obstacles to get over.
It was a healthy debate and in the end I think everyone agreed that we can disagree. And that’s not a bad thing. While financial services can’t produce the beautiful images that car companies can in social media or sell products like coffee shops and clothing stores, we can develop the ideas and social currency that many people rely on to make informed decisions.
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I was fortunate enough to be invited to and attend an event last week hosted by VMA Group in London rolling out the latest survey results of communicators in the financial services industry. I’m an enthusiastic fan of surveys and studies. Here were two takeaways from the study that I found most interesting:
- A little more than half (52%) report to the C-suite (CEO/CFO/Chairman) with 3/4 of those respondents feeling that senior management feel communications is a priority. Among all of the various direct report structures, the report showed that there is a firm link between senior management understanding the role of communications and the prioritization of communications as a management function.
- In terms of personal skills to develop, respondents feel they need to focus mostly on developing relationships outside of the business (23%) and presentation skills (22%). At the bottom of the list were developing business acumen (13%) (see my previous post on business acumen) and creating/engaging writing (8%).
Three trends and issues I hope the study explores in future versions include crisis communication and the role it plays in helping define/elevate the top communicator, the views of social media in financial services, and further analysis of integration and cooperation with marketing.
You can view the results of the survey here: Financial Services Survey: The role of communicators in a changing environment.
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It’s been a busy week for social media in financial services…and it’s only Tuesday.
For years I’ve been an advocate of using social media in a B2B/financial services setting. I recently spoke in London at the Finextra conference about our experiences. It allows you to educate, build advocacy and monitor for issues. There is clearly no doubt that social media has made its mark with consumer brands and in breaking news. But who is lagging and why? Many have pointed to the financial services industry as being the late adopter. In some cases this is true, but in others it is not (e.g. at CME Group we’ve been using social media since mid-2007).
But in the past few days there has been a flurry of news surrounding social media and financial services. Why now? Before I answer that let’s look at what’s been written:
Financial Times: Embracing trends in social networks
Reputation is one of the most valuable assets companies possess, but controlling it amid the rising influence of social media is a growing challenge. Financial services personnel who naively think their company has no presence on social network sites are sadly mistaken, according to Mark Park, head of digital at MHP, a London-based public relations consultancy.
Financial Times: Twitter research promises trading success
However, because these tweets are effectively broadcast for global consumption they can be data mined.
Gorkana: To tweet or not to tweet
Current and potential clients of asset managers increasingly consume their news and conduct their research into new products on the web. The frenetic blackberrying of business people on commuter trains, in airports and by the pool on holiday are reminders of this trend.
Asset managers need to start experimenting and take some steps into the world of social media. At the very least, it is clear that social media is becoming an increasingly important communications tool for journalists and offers asset managers additional ways of communicating with its stakeholders in a very personal and interactive way.
Measuring investor sentiment has long been used by financiers as a tool to divine the future direction of stocks. But traditional tools are decidedly low-tech and less timely, such as the weekly polling of individual investors and financial newsletter editors to see how many are bullish and how many are bearish.
The skyrocketing use of chatty and highly trafficked sites such as Twitter, Facebook and YouTube has created a fresh, massive and useful warehouse of new data. Sophisticated investors view the mining of digital chatter via machines as a way to gain an edge.
Derwent Capital Markets, a London-based hedge fund, was so taken with Bollen’s findings that it will soon launch a fund based on the methodology in his paper.
In these terms, all of Twitter generates only a sand castle of quality data a day. While some of that data is very valuable, such as tweets from CME Group (@CMEGroup), most of it simply tells us about mass sentiment. And because its open and available to everyone, it doesn’t provide an unfair advantage to the computers of Wall Street. On the other hand, the talk about Twitter does reveal the opportunity and challenge of big data.
CNNMoney will begin pulling content from StockTwits’ network of 55 independent bloggers, Lindzon told Wired.com by phone. “Our goal is to make our stream richer with great content, not just tweets,” Lindzon said.
As Twitter has insinuated itself into so many aspects of our lives — as well as major industries, institutions and companies — Wall Street and the broader finance world have been somewhat behind the curve on harnessing social media. With its new redesign and partnership with StockTwits, CNNMoney clearly hopes to change that.
So what’s changed?
First, we’ve had an enormous amount of media attention given to social media companies and its use, from LinkedIn’s up and coming IPO to Facebook talking to Baidu of China to the Royal Wedding in London (infographic), it’s been difficult to escape the usefulness as well as widespread use of social media. In fact, many will argue social media is now the norm.
Second, we’ve seen the financial services industry show an interest in investing in social media companies. Clearly they see value in these organizations.
Third, I think as an industry we’ve had good direction and guidelines set by regulators that have helped define what is acceptable.
But those three reasons alone don’t necessarily justify the recent uptake and interest in using social media by the industry. The real reason as nearly every story above indicated comes down to one word: data. Information, sentiment, links and more on social networks are creating a mountain of data. We’re finally at a point where we have so much data about economies, companies and markets that it can be useful. For instance, just look at this chart generated by LinkedIn at the rise in the number of links shared on its network.
While some may think that the recent firehouse of data is just too much, smart companies will be able to wade through the information and data. Google Analytics is one way of doing this. Using StockTwits to follow your company is another way. Hootsuite also has recently updated its tools for users to better refine and measure effectiveness. And PR firm Cognito has recently launched its own tool for financial services companies to help monitor social media.
So what can a B2B company — not just a financial services company — do to navigate the data? First, have a plan. The best way to do this is to conduct a social media audit. Know what you want to achieve from using social media and more importantly what you want to find out. Second, search for the right tools. You will need to take some time to do this but a good place to start is searching through the Mashable site. In addition, make sure the tools you use fit into your overall branding efforts. Third, build your own social network. Connect with people at the companies you want to emulate and see what they are doing. I’ve always felt that benchmarking — not copying — against others in a variety of industries will help you think smarter. Finally, always remember the focus is on giving your followers what they want. This may take some experimenting but don’t be afraid of failing.
We’ll see in the coming months and year what other changes financial services firms make to their social outreach. Not only will the results of Derwent Capital be followed closely, but I think we’ll see an evolution (not a revolution) of financial services firms being more active in social media. Some great destinations to watch these trends unfold include The Financial Brand, IR Web Report, StockTwits and Visible Banking.
Let me know your thoughts, but more importantly your questions, on this this topic.
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Last week the exchange co-sponsored the Ragan Communications Social Media for Financial Communicators event with our business partner NASDAQ OMX. You can review the entire event on the Facebook page created by Ragan. I was encouraged by the content of this event since it was so narrowly defined for financial communications – and I think a vertical industry focus is certainly the next big phase in social media. And even though the financial services industry is heavily regulated, there were many great examples of companies using various platforms.
If you attended this event you came away thinking, “There really are few reasons to not be doing social media.” Kudos to Mark Ragan and his great staff for putting this event together. I wasn’t able to attend every session but here are my reactions from the panels I did watch.
Be the brand: I have always said that social media at the exchange was never a silver bullet. I think companies that take the approach that social media can “save” their brand are misguided. It must fit within your existing brand and support various initiatives. Steve O’Halloran from ING Direct discussed this during his presentation. He used many real world examples of what ING Direct has done with social media to reemphasize all of the qualities that make the bank unique, fun and a leader in its category (NOTE: I am not currently an ING Direct customer). In particular, Steve showed how they are really helping customers online to learn more about saving money and promote financial advocacy. And even though ING Direct does not have bank branches they do have some of the best cafes to visit. What are you doing to reinforce your brand in social media?
Social media for investor relations is coming…are you ready?: I was pleased to hear from Phil Pearlman at StockTwits that they are soon launching an investor relations tool on their site. We’ve talked about StockTwits before on B2B Voices as an investor relations tool and this is positive news. While this isn’t live yet I’m sure given the focus of the team at StockTwits that this will be a great application and take their offering to another level. If you have yet to visit StockTwits you should check it out — especially if you work for a publicly traded company. What I like most about the potential of this tool is the ability for public relations and investor relations to collaborate more online using social media. Ironically, NIRI’s annual conference took place a few weeks ago and from people I know who attended the discussion around social media was a footnote. This could be a great opportunity for you to work with your finance team and play a key role in educating your C-suite about social media.
And now word from the journalists. A panel of financial journalists — Felix Salmon, Reuters; Stacey-Marie Ismael, FT Alphaville; Connell McShane, FOX Business — answered questions about their use of social media. I was lucky enough to sit on the panel representing the interests of communicators. Felix blogged about the conference and his thoughts on why companies should be using Twitter. One of the key takeaways for me about the panel is that they are all connected to and use Twitter daily — not so much as a broadcast medium but for a way to monitor trends/issues and meet new people (potential sources). I commented, and I think the panel agreed, that Twitter really is not the platform to pitch reporters, but because of its simplicity and real-time information sharing it’s the place to build trust and relationships with reporters.
Enthusiasm. While I didn’t hear any breaking news from Demetrios Skalkotos of NASDAQ OMX about using social media what I did takeaway is that enthusiasm matters. That’s not to take any credibility away from him or NASDAQ OMX — he and the company know what they’re doing in social media. But it was the enthusiasm from Demetrios that really stood out to me and if you’ve ever seen him speak you know what I’m talking about. It’s this kind of passion for our work that makes a difference — whether it’s social media, advertising, writing, design or video production. His presentation was the perfect way to end the two-day event since he left all of us feeling as if we could go back to our job and make things happen. That’s just the type of leadership you need, especially when you are pursing something so new and rapidly changing as social media.
I was also fortunate to present about CME group with my colleague Michael Shore and a copy of our presentation can be found over on SlideShare. If you happened to attend the event what was your takeaway? Share your thoughts about the conference here or if you didn’t attend let us know your reaction to some of my thoughts above.
Allan wrote a post in July on building a social media marketplace in financial services. There have been a few posts in recent news that highlight this issue of using social media concepts and tools in the banking and financial sectors, so I thought I’d take a moment to highlight a few.
- Banks & Social Media – Will Slow & Steady Win the Race? (B2B Bliss) “It’s clear social media is changing the industry. But, engagement is a different story. Regulations and compliance issues still hamper many banks from embracing the truly “open transparency” social media requires.”
- 5 Ways Banks are Using Social Media (Mashable) “By embracing the most popular tools available, the industry has also been embracing the best of what social media culture has to offer, and smaller, community banks seem to be leading the charge when it comes to social media innovation.”
- Integrated social media + financial marketing (The Financial Brand) “The Financial Brand sat down with Tim McAlpine, president and creative director of Currency Marketing, to talk about integrated social media marketing for financial institutions.”
- British bank launches site highlighting customers social media thoughts. Good and bad…but more good (The Next Web) “First direct, a division of HSBC, has launched a microsite devoted to highlighting its customers opinions from across the web.”
- Social Media, Brands and Culture in the Finance Sector (Anne McCrossan)
- And for reference: Ongoing list of Social Media Efforts from Banks, Credit Card, Financial Institutions and Lenders (Jeremiah Owyang)
Update: An article with thoughts from some one of our readers, @podcaststeve, “Bankers conference highlights opportunities, pitfalls of social networking” (In NJBIZ)