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Compass Insight

Should financial services be embracing Social Media to a greater extent?

Fran Elliott - Monday, October 11, 2010

 

Social Media is developing and growing across the UK at an exponential rate.  Is this medium here to stay and what impact could it have on consumers and the way they perceive and communicate with different brands? 

 

Watch this short video to help you decide. 

 

 

Although some of this information is based on the USA, the UK and Europe tends to follow and therefore this phenomenon is set, not only to continue, but to grow and develop in the way social media is used and impacts on consumers.  Currently social media is mainly used as an immediate 'word of mouth' tool, for both positive and most importantly negative experiences, which can have dramatic effects on a brand.  It is, therefore, important all brands, including financial services, to be proactive and look forward regarding how to manage and develop social media to their advantage, rather than only reacting to what is being distributed or worse ignoring what is being posted.  Whilst there are some examples of good practice, it is very clear that the financial industry, doesn't to date appear to have decided whether it should use this media and if so, how and for what purpose.
For example

    • Barclays Bank has an interactive social site for students ‘100 voices’ accessible via their website and Barclays Wealth have a Twitter following of over 2,642, which has doubled within the last 6 months, with regular Tweets being posted.
    • HSBC has a business network which promotes the use of Twitter, hosts blogs etc. for customers and uses Twitter as a career recruitment tool. 
    • Lloyds Banking Group have a twitter site with c. 712 followers, which is growing slowly.  This channel is now being used as a customer service tool, where customers may ask questions about the banking service.

    • Last year Direct Line had launched ‘teamergency’ on twitter, which has subsequently been removed At the end of last year Standard Life had a tweeter presence but hadn’t sent any Tweets since early August. This changed a couple of months ago so that members of the public had to make a request to follow them.  My request is still pending with no response, two months on!!  This appears to have been removed now, but their German counterparts are relatively active on Twitter.

First Direct, however, appears to be one of the few financial service companies to be embracing and directly integrating social media within their communications strategy.  They are very active at posting Tweets to their 1,479 followers (which has recently doubled) and have a networking forum ‘Talking Point’, accessible via their website home page, which provides a live feed of comments.  It could be seen as a very brave stance to be so open to public feedback, but as we all know, it is how a company responds to negative comments/problems which often define the company.  Importantly First Direct can respond directly back to anyone with a negative comment through the technology and hence set up a two way dialogue to manage dissatisfaction or problems.   

This open approach may not be one that other financial service companies may wish to follow, but can social media be ignored?    

Consumers are becoming more powerful, more demanding and accepting of new communication tools, but do you know what they want from such media, or the potential impact of free communication on your brand, to enable you to build your strategy upon?  

We feel there may be the opportunity to conduct a syndicated study into this area. 
If you’d like to discuss the possibility of helping to develop a syndicated study into the relationship between consumers and social media, or want to conduct an ad-hoc piece of research into the subject, please contact us through our Contact form or call us on 0115 923 5865

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