Social Media in Financial Services 2010

Overview 1
Catalyst 1
Summary 1
Methodology 1
Table of Contents 2
Table of figures 3
Table of tables 4
INTRODUCTION 5
Digital networks are now more extensive than physical ones, and this has impacted consumer attitudes towards information 5
The reach of social media knows no boundaries 6
The reach of social media is truly global 6
FS providers hold false beliefs about the value of social media 8
Myth: Social media is a fad 8
Myth: Social media has limited appeal beyond younger demographic segments 9
Myth: Information shared via social media can only have limited impact 10
Social media may not directly drive sales, but still adds value 10
Sales will be driven through viral marketing 10
Another reality: Social media will not solve all problems 12
Not all consumers are online and not all have the fast connections required for some elements of social media 12
THE FUTURE DECODED 13
Trend: Social media permeates every part of consumers' day to day lives 13
Social media is now the most popular online activity 14
Time spent on social media varies from country to country 15
Insight: Consumers are already using social media for their financial needs 16
Online media is the most popular source of financial advice for consumers in the US, BRIC and APAC 17
Key takeout: consumers are using social media therefore providers need to at least increase their visibility 18
Insight: Social media is developing quickly and aligning with consumers' needs 18
Social media is fundamentally challenging previously held beliefs surrounding consumer behavior 19
Power has shifted from businesses to consumers 19
Social media is breaking down privacy barriers which have typically shrouded consumers' personal financial situations 19
Key takeout: nothing can be taken for granted with social media; consumer demands will continue to surprise 20
Insight: Consumers are revealing huge amounts of information through social media 21
The global nature of social media creates an opportunity in terms of information available 21
The value and amount of feedback consumers are able to give is much greater than that previously recorded 21
Consumers are keen to offer this qualitative information directly to providers, but currently lack the platform to do so 21
All information can be utilized 23
Technology is only part of the solution 24
A holistic approach combining technology and culture is key 24
Key takeout: FS providers must recognize the value of a customer-centric approach 24
Positive brand perceptions are key to improving customer retention and recommendations 25
Key takeout: providers must beware of a backlash if they misuse consumers' personal information 25
Trend: Social media is no longer the reserve of the younger generation 26
Growth of Twitter usage in the workplace also highlights social media's increasingly professional reach 28
Insight: Adults are using social media to help with financial decisions just as much as youngsters 29
The popularity of online resources as an aid to financial decision making is evident in all segments 29
Online resources for aiding financial decisions are used most by the 25-34 segment in almost all regions 30
Online resources are more popular than traditional sources of advice for 18-34 year olds 31
Price comparison sites, in particular, are as readily accepted by older consumers as they are by younger ones 32
The rise of financial account aggregators has contributed to the popularity of the online channel in aiding consumers' personal financial management across all segments 33
Key takeout: FS providers must not assume social media is only useful for targeting Generations X and Y 34
Trend: Social media can be very damaging if ignored 35
Insight: Higher accessibility to product recommendations mean FS providers have to work harder to retain customers 35
Those who favor online media are more likely to investigate other products in the next six months 36
Insight: Widespread negative publicity has the potential to do serious damage if not counteracted 37
'People power' should not be underestimated 37
Key takeout: FS providers must remember consumers talk about the very good or the very bad 40
ACTION POINTS 41
ACTION: Social media must be at the centre of banks' communication strategies 41
Integrate technological data-mining techniques and social media to create a holistic customer retention strategy 42
Any social media strategy is worthless unless accompanied by a committed company culture 42
Motivate your employees 43
Reward your employees 44
Engage your employees the same way you expect to engage your consumers 44
ACTION: Banks must find their place in the 'new community' 46
Transparency and community building are important in building trust 47
Social media is not just for smaller, more agile players; there is social media to suit all 48
APPENDIX 50
Additional data 50
Methodology 54
Further reading 55
Ask the analyst 55
Our Consultancy 55
Disclaimer 56
List of Tables
Table 1: Social media audience and time consumption by country 50
Table 2: Sources of advice by country 50
Table 3: Indication of receptiveness to the online channel for financial advice, by country 51
Table 4: Indication of receptiveness to the online channel for financial advice, by age 52
Table 5: Indication of receptiveness to the online channel for financial advice amongst different age segments, by region 52
Table 6: Indication of receptiveness to different channel for financial advice, by age 53
Table 7: Consumers who have bought products via a price comparison site in the last six months, by age 53
Table 8: Impact of different advice sources on likelihood of investigating other products in the next six months 54
List of Figures
Figure 1: Digital networks are now bigger than physical ones 6
Figure 2: Social media's reach is global 7
Figure 3: FS providers hold false beliefs about the value of social media 8
Figure 4: Social media's reach is vast 9
Figure 5: Social media can boost sales 11
Figure 6: Social media permeates every part of network users' day to day lives 14
Figure 7: Time spent on social media has increased year on year 15
Figure 8: Time spent on social media varies from country to country 16
Figure 9: Consumers have revealed the online channel's usefulness in making financial decisions 17
Figure 10: Online media is the most popular source of financial advice for consumers in the US, BRIC and APAC 18
Figure 11: Blippy has proved that social media has fundamentally changed consumer behavior and broken down privacy barriers 20
Figure 12: Providing a page where customers could provide feedback would most improve brand perceptions 22
Figure 13: First Direct has pioneering in the FS space in terms of feedback gathering 23
Figure 14: Consumers with greater trust are less likely to switch 25
Figure 15: 18-24 year olds are under-represented at Twitter (while the 25-34 year old segment is over-represented) 27
Figure 16: 25-54 year olds have driven Twitter growth 28
Figure 17: Growth of Twitter usage in the workplace also highlights social media's increasingly professional reach 29
Figure 18: Adults are using social media to help with financial decisions just as much as much as youngsters 30
Figure 19: Online media is most popular amongst the 25-34 segment in almost all regions 31
Figure 20: Online resources are the most popular source of advice for FS amongst 18-34 year olds 32
Figure 21: 35-49 year olds top price comparison site usage figures 33
Figure 22: The rise of financial account aggregators has contributed to the popularity of the online channel 34
Figure 23: Recommendations from personal acquaintances or opinions posted by consumers online are the most trusted forms of advertising 36
Figure 24: Those who favor online media are more likely to investigate other products in the next six months 37
Figure 25: Campaigns such as 'Move Your Money' highlight how social media can be used against banks 38
Figure 26: Stop HBOS in the UK also threatens the bank's reputation 39
Figure 27: Social media must integrate itself and interplay with all other channels in order to add value 42
Figure 28: Any social media strategy is worthless unless accompanied by a committed company culture 43
Figure 29: It is clear that Coca-Cola 'gets' social media 47
Figure 30: Being a Mobank customer is very much like being part of the 'in group' 48