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Strategy 2010: Social media and the financial industry

Release Date: 10/30/2009

As a financial institution executive, are you taking advantage of free social technologies that can increase assets 100% or more in less than 18 months?  Your customers are behaving differently than they did 10 years ago, and it's all thanks to a major shift in communication: social media has created virtual communities that have the potential to significantly impact your business - and you must understand how to manage those conversations to leverage the revenue generation potential and stay ahead of the associated risks.

"Never before could we market to and communicate with 1.5 billion people at virtually no cost," says Scott Klososky, financial industry thought leader on social media. When it comes to the financial services industry, those benefits must be balanced against inherent regulatory and security risks. this clash of interests is summarized nicely by Social Media Today (pdf):

"No longer do companies talk and customers passively listen. Harnessed to the enormous reach and depth of the web, inexpensive or free social media tools ... have given consumers a global soapbox and with it the potential to make or break reputations, enhance or damage brands, create winners and losers in the marketplace, and do so with lightning speed."

The potential reach and influence of social technologies boils down to that notion of conversation. Your current and potential customers/members, partners, vendors, influencers, and regulators (and stakeholders you never even thought of) are all having conversations whether you and your institution are in the social media mix or not. The question then becomes: how can you engage these virtual communities to share experiences and ideas that build market share and brand equity while reducing risk? The answer comes in building a comprehensive social media strategy grounded in executive sponsorship, alignment with business strategies, risk management, user education, editorial commitment, and forward-thinking perspectives.

Among HEIT's clients, social media and associated security, compliance, brand, and customer relations dimensions are becoming hot topics.

"It's definitely an area of concern for us," said Heritage Oaks Bank SVP Joe Carnevalli, "Especially because we don't understand what our users are doing with it because we don't believe they know what they're doing with it. We'd really like to better understand what examiners and auditors will expect of us and what their guidelines are."

Social Media Today noted, "Although the number of banking-industry/financial-services social media initiatives is still relatively small, their influence is spreading. For banking, as well as for most industries, the genie is out of the bottle."

HEIT will be convening a number of social media and financial industry experts in a webinar series to address those concerns. Financial social media guru Scott Klososky (president of iThryv), financial industry thought leader Dan Holt (HEIT CEO), and social media communication researcher Jaime Banks (HEIT Director of Marketing) will present trends, strategies, and best practices, and take your questions on november 12^th and 19^th - click here to register for the free webinar.

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