A Case Study for Financial Professionals
According to Nielsen there are over 140 million unique visitors to social media sites per month in the US, with an average daily time spent of over 6 hours per person on Twitter and Facebook. The relevance of social media on society and the impact it has/and is having on our culture and the way decisions are made is significant. Social media offers new channels for advertising and customer communications. Businesses and organizations that have developed successful social media strategies are reaping significant rewards.
Research has consistently shown that businesses that continue or increase marketing, advertising, and PR not only maintain, but gain market share.
This is especially important for financial organizations, because research also shows that customers’ confidence levels are tied to organizations’ market presence.
Typically financial service businesses have been early adopters of technology solutions, however with the advent of social media, financial institutions face additional challenges to implementing social media that other businesses do not.
Ambiguity of what is offered, as well as special compliance requirements for communicating with customers, advertising products and services, protecting customers and overall risk mitigation have left many hesitant to move into social media. The possibility of fines from non-compliance, potential security issues during a time of overall insecurity and distrust has left many simply waiting.
The seriously ugly…Compliance and Security
The FTC, SEC, FINRA, and the FDIC all have something to say about social media and online communications. Is that regulated enough? The learning curve to even begin to manage this is daunting.
The security of systems and data from potential breach, and the security of proprietary information through improper release are all major concerns. If any of these happen, large fines are only a part of the potential consequences.
Firms have typically divided into two groups – those that have completely blocked these networking tools and those who have attempted to adopt them. The adopters, however, have had a daunting labor intensive manual effort not contributing highly to the overall success of the business.
Yet help is on the way…
What is exciting about these challenges is there is plenty of room and less competition to gain an incredible edge online. Financial firms who utilize well researched and integrated social media tactics in an overall campaign will increase market exposure, advertise their unique selling proposition, and generate positive PR.
New FTC rulings on what is considered communication, recent FINRA/SEC guidelines, secure software platforms now available to provide non-labor intense compliance management for maintenance of protocols and systems can help safeguard institutions and customers.
Combined, these advancements make this an opportune time for integrating social media into your overall marketing and business development strategies.