Social Media in Finance January 2012

Made in heaven or
marriage from hell?
Social media and
the financial sector

Social media offers the financial
services sector an opportunity to
resuscitate its relationship with the
public after the financial crisis…
but does it have the expertise and
understanding to use social media
to do so?

About Cicero Consulting
Cicero is the leading provider of financial
sector communications, offering global
coverage from offices in London, Brussels,
Washington and Singapore. Founded in
2000, Cicero offers public affairs, digital,
media relations, and research services to
more than 200 clients in over 20 countries
around the world.

2 Made in heaven or marriage from hell

Introduction

While many businesses have embraced social media, the relationship between
the finance sector and social media holds many similarities to teenagers and sex.
Many people are talking about it, a few are doing it and those that are, aren’t
doing it that well, with one or two exceptions.

While many businesses have embraced social confidence to understand, develop, implement
media, the relationship between the financial and manage a social media strategy. For the sector
sector and social media holds many similarities to make the most of the opportunities available
to that between teenagers and sex; many people it must build internal capacity to embrace the
are talking about it, a few are doing it and those opportunities that social media offers and begin
that are, aren’t doing it that well (with one or to implement strategies that go beyond a Facebook
two exceptions). page or Twitter profile by truly engaging with clients
and prospects in original and creative ways. The
Many say the financial sector is different to other challenge is not just for the financial services
sectors and this is why it is reluctant to engage companies; the financial regulators need to evolve
in social media - the marketing of financial as well to make sense of digital communications
products is strictly regulated, while the financial to both protect consumers without inhibiting
crisis has exacerbated industry concern about innovation and creativity.
a potential consumer backlash online. But these
arguments can no longer be used as an excuse Over the last few years, social media and the
to curtail the activities of the financial sector in financial sector could have been a marriage from
utilising social media. In other sectors, businesses hell as it navigated the era of banker bashing. But
are successfully and creatively utilising social looking forward the union between social media
media and it is fast becoming part of their and the financial sector could be made in heaven,
communications armoury. as social media provides the sector with a form of
repentance by offering a way to communicate and
It is now time for the financial sector to embrace engage with the public and consumers through
both the opportunities and challenges that social innovative social media channels. It is now time
media presents. Given the turbulent years the for the financial services industry to take social
sector has experienced and the loss of trust it has media seriously.
felt with consumers as a result, social media can
offer the financial sector a new means by which If the sector can use social media effectively then it
to engage with its customers: to understand them will provide the means to resuscitate its relationship
better and slowly rebuild relationships and trust. with the public. This is an opportunity that can no
longer be ignored.
Our report demonstrates that there is an
eagerness and real excitement within the finance
sector to more fully embrace social media,
with many respondents seeing it as the future Chris Jackson
of communications. However, there is a rather Head of Digital, Cicero Consulting
stark acceptance that many do not yet have the
January 2012

3

Executive summary

Social media is revolutionising the way we all communicate. Despite this the financial
sector has been slow to embrace the opportunities that social media provides.
Within this research report we explore and analyse current perceptions and future
perspectives within the financial sector towards social media.

The growing role of social media in the Fears and challenges for the finance sector in
finance sector using social media
• 25% of respondents felt that social media offers • Our research demonstrates that the financial
a new way to communicate to tomorrow’s sector holds five fears of social media: potential
consumers. brand damage, compliance issues, lack of
expertise, difficulty in measuring ROI and
• 57% of financial services professionals are
resource.
interested in social media, saying it offered a
new and interesting method of communicating. • One quarter of respondents are daunted by the
volume of traffic on social media and how to
• 41% were interested in discussions of their
monitor and manage it.
brand or firm occurring on social media.
• One third of people surveyed were concerned
• 30% of those surveyed see social media as the
by the development of social media because
future of communications.
of a lack of internal understanding within their
• 81% of people in the financial sector see Twitter organisation to make the most of social media
as the most important social network for their opportunities.
organisation, compared to under 50% for
• 38% of respondents are concerned by social
LinkedIn and Facebook.
media because of a lack of time and resource
dedicated to it
Untapped potential remains high within the
financial sector
How the finance sector is utilising social media
• Nearly 60% of those working in financial services
• 36% of respondent organisations are using
think that their industry has so far not been
social media to support business activity,
effective in utilising social media..
and 11% have fully integrated it into their
• Despite being interested in the opportunities business strategy.
presented by social media, 38% of respondents
• Firms are driven towards interest in social
are concerned they are missing out due to a lack
media by their customers, with 40% saying
of time and resources dedicated to social media,
that they are interested because their brand is
and 13% don’t know how to make the most of it.
discussed online.
• Less than half of the firms we surveyed said they
• Spending on social media is low compared
are making effective use of social media, and a
to investment in other forms of communications,
tenth are not even considering how they could
59% of firms are spending less than £50,000
do so.
per year on social media and 29% are
• The financial sector lost trust among the public spending nothing.
during the financial crisis. Now social media
arguably offers the sector a real opportunity to
rebuild its brands and trust among consumers.


The role of external support Social media and public policy development
• 40% of financial services organisations are • Social media is seen as a potentially useful
using external advisers to help their company advocacy tool, with 75% seeing it as important
understand social media. to the development of public policy over the next
five years.
• 47% of those using external support are using
them to monitor social media. • Social media is deemed useful for influencing
public policy since it can be used to speedily
• 33% are using external support for community
create a campaign, and the views of the public
management.
can be quickly accessed, gauged and shared
• 40% using them to understand new with policy makers.
developments.

From reviewing the attitudes of those in finance, this has highlighted six
necessary steps that those working in the sector should undertake when
approaching social media.
6 steps to building a platform for success
in social media

1. Understand 4. Organise
At the outset of investigating the opportunity that Social media cuts across all aspects of a business,
social media offers it is paramount to research and therefore it is essential to have a dedicated team
understand how your target market want to be in place with senior management buy-in across
communicated to. the organisation.

2. Invest 5. Experiment
While social media can be a cost effective means Before launching social media across your
to improve brand awareness and consumer business, experiment on smaller more manageable
engagement, it does involve an investment of time, projects to build understanding, interest and buy in
resource and buy in from senior management. across your company.

3. Listen 6. Evaluate
It is essential before beginning any social media Always measure the impact of any social media
programme to listen to your target market to activity as this will highlight areas of success and
understand what they are saying about you areas for improvement and aid your organisation
online, your issues, products and competitors. in defining effective metrics for social media
This information will enable your organisation to investment.
understand your clients better and to tailor your
social media strategy accordingly.

5

The growth of social media

Social media has been one of the defining developments of the 21st century,
with the exponential increase in use of social media revolutionising the way we
all communicate with those we know, and increasingly with those we do not.

The basic principle behind social media is to enable Figure 1. The core principles of social media
conversations, sharing, engagement, trading and
learning. These ideas are nothing new: Aristole said
that “Man is by nature a social animal”. But where
social media has revolutionised this notion is in the
Learning
scale and speed at which these interactions occur.
Social media has created a global phenomenon by
enabling collaboration on a meta scale. Men and
women are now by nature social media animals.
Engagement Communicating
You only have to look at the adoption of social
media by the global population to see that its use is
now ingrained in most people’s lives.
Social
Take, for instance, the growth of Twitter. In 2007 Media
people were tweeting 5,000 times a day. By 2008,
that number was 300,000, and by 2009 it had
grown to 2.5 million per day. In 2010, people were Discussing Sharing
sending 50 million tweets per day – that equated to
an impressive 600 tweets per second.1

The idea that a website originally designed to
Trading
connect students at Harvard could grow in eight
years to have more active users than the total
population of China, would have been laughable
in 2004, but today Facebook is one of the most
powerful and important social networking sites.
To put this in perspective, it took radio 38 years to
have 50 million users; it took Facebook three years
and eight months.

Men and women are now by
nature a social media animal.


It took the radio 38 years to have 50
million users, it took Facebook 3 years
and 8 months.

Social media platforms such as Facebook and However, new and different social networking
LinkedIn will continue to grow and evolve, but the platforms will evolve and will enable social
very nature of social media means that over time networking to continue to grow in new and
they are likely to decline as new social networking previously unthought of ways.
sites capture the interest of consumers. The rapid
decline of MySpace is a case in point. One of the One thing we can be sure of is that social media is
big unknowns of 2012 will be whether Google+ here to stay. The challenge now is for businesses
can challenge the dominance of Facebook and to understand how the boom in social media will
overtake it. Looking specifically at the financial effect them, issues they are involved in and their
sector our research demonstrates that Twitter environment. A few of the ways that social media
at present is seen as the most important social can affect these businesses include its brand
network for the sector, but it will be interesting identity, its market share, and its share price.
to see how this evolves as it embraces social
media further.

Figure 2. Number of active Facebook users (millions) 2

800 750

600
500
Millions

400 350

200
100
50
1 5.5 12
0
2004 2005 2006 2007 2008 2009 2010 2011
Years

7

Social media and business

Social media has added a new means of contact between individuals
and their friends and family. However, where it has really revolutionised
relationships is between consumers and business.

Many businesses initially saw social media as a possible. With businesses such as Coca Cola
new pasture to advertise on, but, as companies having over 30 million ‘Likes’ on Facebook or
have begun to understand the principles of social iTunes with 17 million ‘Likes’ this provides these
media, they are now beginning to appreciate the organisations with enormous potential to market
power of social media and are going much further their products and engage with their consumers.
than just having a Facebook advert or Twitter page.
It can be enormously powerful to have your brand
With 90% of consumers trusting a recommendation advocates creating a buzz about your company.
from a person they know compared to just 33% On the flip side, it can be equally damaging to have
for online banner ads, the value of mobilising disgruntled customers criticising your company’s
consumers via social media strategies should brands, business practices and operations,
not be underestimated.3 With the right strategy, especially in one of the toughest marketplaces
companies can empower their consumers seen for decades - where household incomes
through social media campaigns to be walking have fallen for five years running.4 The Blackberry
brand advocates that will freely share product server crash in October 2011, demonstrated how
developments, adverts, announcements to their consumers could quickly turn to social media
friends on a level that has never before been platforms to vent their fury at companies when

igure 3. Number of Facebook Likes and Twitter Followers for the finance firms in the FTSE100
F

AVIVA Twitter Followers
Lloyds Group Facebook Likes
Standard Chartered
HSBC
Barclays
RBS
Old Mutual
ICAP
Glencore
Legal and General
Standard Life
Schroders
Hargreaves Lansdown
Admiral Group
Man Group
Hammerson
British Land
Prudential
RSA
Experian
Resolution
Ashmore
0 17500 35000 52500 70000


It can be enormously powerful to have your brand
advocates creating a buzz about your company. On
the flip side of this it can be equally damaging to have
disgruntled customers criticising your company’s
brands, business practices and operations.

things go wrong. When the Blackberry server their business. Customers are increasingly venting
when down, Twitter was swamped by unhappy their dissatisfaction on a company’s Facebook wall
Blackberry business users making #Blackberry or Twitter profile, because they know it often leads
a trending topic on the site because of the firm’s to the quick resolution of a customer complaint.
failure to fix the servers and poor customer service.
As Alastair Campbell commented on Twitter to his Consumers have always had the opportunity to
117,000 followers: “My blackberry trending ought send their feedback to businesses, but never
to be good news for blackberry in these techie before has it been so easy to do so. What has
days. But it’s not. My blackberry in blackout mode. been most powerful is how this feedback can
Sort pls.” be seen by the world, enabling others who have
experienced similar issues or hold similar concerns
Social media has helped to put companies and to add weight and volume to the criticism. To avoid
people on the same level. This has revolutionised any further brand damage it is now essential for
the traditional notion of B2C communications as companies to be aware of what is being said about
we see the emergence of C2B communications. them online and respond to it.
Businesses are no longer the sole owners of
their brands; consumers through social media Social media poses many challenges and
increasingly dictate how brands and companies offers many opportunities for businesses and
are perceived. The development of social media organisations with the success and level of
has created the biggest and most accessible adoption having varied to date. However, as social
comments box, which we can all access, thanks to media grows and develops further, it is making
powerful search engines like Google and Bing. it almost impossible for businesses both large
and small to ignore this phenomenon and this
Restaurants and hotels are now being held to is increasingly apparent in the financial services
account on Trip Advisor, which can make or break sector.

igure 4. Volume of Twitter mentions about Blackberry in October
F
– the spike correlates to the server failure

700

600

500
Thousands

400

300

200

100

0
02 04 06 08 10 12 14 16 18 20 22 24 26 28 30
October 2007

9

Social media and the
financial services industry
Since 2000 social media has grown exponentially in prominence and is now firmly
embedded in our lives. It now influences, informs and increasingly shapes the way
we interact and engage with friends, colleagues, companies and government. Many
of the early corporate adopters to social media were with the FMCG sector, with
social media providing them with the opportunity to engage with their consumers
through new and innovative marketing and advertising campaigns. This has helped
them to further enhance their customer relationships and connect in new and
different ways.

The online clothes retailer Asos is an excellent The relatively slow adoption of social media by
example of a company that has been able to the finance sector can be in part be down to their
fully integrate its sales strategy into social media. late arrival into social media. While consumer
Asos has blended a variety of rich and interactive brands were advertising, devising and exploring the
Facebook features which have kept consumers opportunities from mid-2000, this was not the case
interested, while also being one of the first for the finance sector. Our research shows that
companies to introduce a Facebook store. Their for those working in the finance sector it was not
Twitter personality has encouraged users to engage until 2008 when the majority of financial services
with their brand, which has seen their social media professionals and their organisations began to
presence develop exponentially, enabling them to appreciate the opportunities that social media
promote their brand to a larger online audience. offered. To begin there was a degree of cynicism
amongst some sectors of the finance industry
At one level you could perceive financial services towards social media. They viewed it as a fad and
firms and social media as a perfect fit. The success not appropriate for their target market and thus it
of a finance company is based on its ability to had limited commercial use.
build client relations across the world, analyse
rapidly changing vast quantities of data, and However, as the demographics of those using
harnessing the latest technology to move ahead social media have changed, companies have
of the competition. All these qualities are essential begun to understand the potential of this platform
when making the most of social media. However, to build communications and marketing strategies
the level of engagement and understanding of around.
social media by the financial sector is relatively low
compared to other corporate sectors. Interest and While other business sectors began to build
action by financial services is now on the increase, social media strategies and fully embrace
as the industry begins to see the opportunity that the opportunities that social media presents,
it presents. the financial services was confronted by two
challenges: one external and one internal.


It wasn’t until 2008 when the majority
of financial services professionals
and their organizations began to
appreciate the opportunities that
social media offered.

Figure 5. When did your organisation become aware
of the potential of social media?

+ 5 years ago This year
9% 9%
5 years ago
4%

4 years ago 1 year ago
9% 13%

3 years ago
24% 2 years ago
31%

igure 6. Changing demographics of those using Facebook
F

43.3m

43.3m

43.3m
Number of 42.7m 43.3m 43.3m
Facebook
users 43.3m
43.3m

Age 13-15 16-17 18-24 25-34 35-44 45-54 55-64 65+

Increase
over 2009 59% 59%
68%
72% 76% 73%
82%
124%

11

The external challenge
– The financial crisis and social media
The boom in popularity of many social networking sites accelerated through 2007,
this was also at a time when parts of the finance sector were under enormous strain
as the credit crunch hit. The credit crunch and subsequent financial and economic
crisis have caused enormous reputational damage for the financial services industry.

Social media platforms played an instrumental role financial crisis have been extremely damaging
in the reporting and discussions about the financial to the reputation of the financial sector among
crisis, with journalists tweeting and blogging on the public. The financial crisis has spectacularly
the developments of the crisis. One of the defining damaged the level of trust that many consumers
moments of the UK financial crisis, was the have in financial institutions. To put this in context
public run on Northern Rock. This was arguably in 1983, 90% of the public agreed that banks in
kicked off by a blog entry by the BBC business Britain were well run, according to the British Social
correspondent, Robert Peston. The ongoing Attitudes survey. In 2009, that plunged to 19%.5
reporting and dissemination of stories about the

igure 7. Boom in social media whilst the finance sector goes through its toughest period
F

reaches 500m
Barack Obama
global users
raises $500m
launched
for campaign
launched online

Wikipedia
launched
launched
launched
reaches 1 million Iranian anti-
UK users government
protests
goes public
launched organised
valued at $3bn
launched via Twitter

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Dot-com
bubble bursts US subprime
bancruptcy lending peaks

collapses Ireland seeks
EU/IMF bailout
Enron scandal 2000s property
bubble inflates

bailout Eurozone crisis
fails claims Greek
Lloyds and Italian
HBOS Prime Ministers
takover


The ease in establishing a campaign on social media and the success of similar
movements in the past mean that in 2012 and beyond business and specifically the
finance sector are likely to be the target of similar campaigns with the potential to
cause reputational damage to organisations.

Because of the external environment, many The growth in social media and continued
financial services firms were reluctant to build a difficulties that the global economy is facing
social media presence at a time when not only have led to a number of social movements
their industry was going through fundamental developing online and generating direct action
change, but also public sentiment towards the around the world with financial organisations and
financial sector was at its lowest ebb. But multinationals often targets of public action. The
while many companies did not necessarily want example of UKUncut which started in October 2010
to build their social media profile, consumers saw the development of a group of activists united
were talking about them online with the financial in concerns about public spending cuts
sector no longer having the ability to control what and the issue of tax avoidance that evolved into a
was being said about them, which lead to further viral campaign. In the US, the Occupy Wall Street
reputational damage. Movement has had a similar effect, by first bringing
sections of the public together online and then
Even before the financial crisis began, social allowing them to take their campaign to the streets
networking sites were already being utilised by to vent their feelings about the current economic
consumers to place pressure on financial firms. and political environment. Within both movements
The National Union of Students claimed victory corporate organisations have been targeted by
over the global banking giant HSBC after mobilising the movements and have arguably tainted the
protests on Facebook. The online campaign was companies and brands that were the focus
launched to persuade HSBC not to take away of attention.
interest-free overdrafts as soon as they graduate
from university. The campaign generated over The ease in establishing a campaign on social
5,000 supporters and demonstrated the potential media and the success of similar movements in
power of consumers when they collaborate on a the past mean that in 2012 and beyond, business
mass scale through social media. and specifically the financial sector are likely to be
the target of similar campaigns with the potential
to cause reputational damage to organisations.
Therefore, it is essential for the finance sector
and other multinationals to fully understand social
media and the reputational threats it poses, so
that they understand and are in step with evolving
consumer attitudes.

13

The internal challenge
– The issue of compliance
It has not just been the external environment that has constrained the willingness
of financial firms to enter the world of social media. Internal constraints have also
served to limit the ability of the financial sector to really embrace social media. Many
financial services brands and institutions have been reluctant to use social media
tools because of the stringent compliance and regulations that govern the sector.

This is because many financial products and The internal and external challenges facing the
services, unlike others, are strictly regulated with financial sector in using social media has meant
detailed compliance and guidelines in terms of that many financial firms have been reluctant to use
what organisations can say about their products. social media as it is another area where they could
Caution principally stems from two aspects. One, fall foul of the regulator and generate potentially
because of the tight codes of data sharing for negative consumer reaction.
financial services brands. Because of this, external
sites like Facebook and Twitter have often been While the financial services industry has faced
banned or tightly controlled by the company many challenges in understanding, responding
firewall due to a fear of information inadvertently and using social media our research with decision
being leaked out. Secondly, many financial makers in the financial sector demonstrates that
regulators’ strict rules on the use of new media do there is now an enormous appetite amongst the
not exactly encourage financial firms to engage in financial sector to make the most of social media
social media and thus using social media is seen as as they overwhelmingly see the opportunity it
another compliance hurdle to overcome. presents to their clients and business.

Social media moves quickly, and while regulators
igure 8. How do you address the balance?
F
have made some effort to update its rules, it is
difficult for a regulator not to fall behind given
the time-consuming and costly nature of devising
Data
new rules.6 Security
Internal compliance procedures and ‘sign off’
processes have arguably stifled the eagerness
Potential
of some financial firms to engage with social for
Brand Da
media. Furthermore the rapid speed at which New way mage
s to
social media flows means that a lengthy sign off communic
ate
process for online engagement can mean that by to clients Complian
the time companies come to communicate, the ce
Issues
issue has moved on. A core tenant of social media
Opportun
is its fluidity - it doesn’t stop and wait, meaning ities
companies need to move fast if they want to keep Challenge
s
pace with the conversation. With traditionally rigid
compliance and regulatory structures inhibiting
social media interest and development this has
further held the financial services companies back.

Social media moves quickly, and whilst the FSA has
made some effort to update its rules, it is difficult for a
regulator not to fall behind given the time-consuming
and costly nature of devising new rules.


The opportunities created by social
media for the finance sector
The financial sector has been slow to utilise social media as it has taken until 2008
for it to become aware of the potential of social media and a further year on top of
that for companies to be actively using it by 2009, according to respondents in our
survey. There is also a feeling that the finance sector has been somewhat ineffective
in its use of social media to date.

Despite the challenges that social media It is clear that social media has revolutionised the
presents to the financial services sector it communication strategies of many financial firms,
is now overwhelmingly viewed as the future changing the way they think and plan. While social
of communications by financial services media has changed the way many companies
professionals. Over 45% of people we surveyed communicate, it has also changed the way that
described their organisation’s outlook towards their customers communicate and engage with
social media as excited; this compared to just 18% their company and brand.
who said their firm was concerned by it. The reason
for the level of excitement around social media is One of the key reasons that financial firms are
because the majority of respondents believe that interested in social media, stems from the fact
social media will be more important in the next five that they want to know what is being said about
years compared to other forms of communication. them online. With the development of social media
This belief stems from the view that social media monitoring tools, companies can now see where,
will transform how companies do business as it by whom, and why they are being discussed on
offers more opportunities than traditional forms of social media platforms. Increasingly financial firms
communication to engage with consumers. To put are even using social media as a means to monitor
this in perspective a little over 5% of respondents online conversations and answer customer queries
thought that the financial sector would remain and complaints.
dependent on traditional forms of communication,
and a further 2% felt that social media was a fad.

igure 9. What interests your organisation most about social media?
F

Social media provides a new and interesting method of communications 57
Our brand/organisation is being discussed online and we need to hear what is being said 40.7
Social media influences the public debate 38.6
Social media is the future of communications 30
It is cost effective marketing and advertising 30
Social media can inform our messaging 30
Our customers expect us to have a social media presence 22
Consumers respond to social media 22
Our staff expect us to have a social media presence 14.3
Competitors are using it and we do not want to be left behind 14.3
Don't know 8.6

0 10 20 30 40 50 60
Percent

15

Over 45% of people we surveyed described their
organisations outlook towards social media as excited
this compared to just 18% who said their firm were
concerned by it.

By monitoring conversations online, companies While the financial sector may have started
are now able to understand what issues their slowly in the field of social media, the variety
customers and wider commentators are discussing of opportunities it offers to companies when
in relation to their brand. Our research showed communicating to consumers has prompted
35% of people surveyed thought that the attraction interest and a desire to understand how they can
of social media was that it was a way to develop make the most of this new medium. With one
new sources of market intelligence. A further quarter of respondents from the sector seeing the
one third of respondents said that social media benefits social media offers when communicating
provided a way to inform brand positioning and with tomorrow’s consumers, it is likely that
messaging, by helping them understand consumer increasingly firms will use it to build relations
issues and current feeling. With the right strategy of with new consumers.
listening to social media conversations, companies
can use it as the biggest and most honest focus From the responses to our research it is clear that
group to which they have access. social media has transformed the communications
environment for many financial services companies.
Interestingly, while companies are eager to listen Not only by changing how they communicate
to consumer social media conversations, only with customers, but also how their consumers
one in five respondents believe that consumers communicate with them. As consumers become
respond to social media. Furthermore only 22% of increasingly comfortable about using social media
respondents actually thought that their consumers and companies begin using it more as a part of
expected them to have a social media presence. As their communication strategies, it is essential for
more companies begin to utilise social media and companies to listen and respond to consumer
it becomes the norm for the financial sector, with feedback.
firms finding more creative ways to engage with
customers, it is likely that consumers will become
increasingly responsive to it.

Internal pressure from employees for their company
to have a social media presence was low amongst
respondents, with only 14% suggesting that
this was a reason for their interest. The fear that
competing firms will steal a march on them in the
social media sphere does not seem to be a big
driver of interest, as only 14% stated this as a
reason to use social media. Given that just 13% of
respondents in our survey believe that the financial
sector has been effective in using social media,
many firms may feel they don’t have too much to
do to catch up with recognised early adopters such
as First Direct and American Express.


The challenges presented by social
media to the finance sector
While our research demonstrates the excitement and interest in social media, it
also displays that many companies are struggling to overcome the challenges and
concern this new opportunity it creates. Our research highlighted that there are five
fears about social media among those working in the financial sector.

The biggest concern that financial services One third of people surveyed were concerned by
organisations currently have about social media the development of social media because of a lack
is the fear of brand damage, with over half of of understanding within their organisation to make
respondents concerned about the possibility of the most of social media opportunities. A further
this occurring. This fear is exacerbated by the 38% of respondents had concerns due to a lack
rapid speed and volume at which conversations of time and resource dedicated to social media.
occur on social media platforms. This could lead Our research shows that one in ten respondents
to a reputational crisis and the organisation may were concerned about social media because they
not feel sufficiently qualified to manage it. This is lacked the understanding to make the most of
a key concern, with one quarter of respondents it, while 13% said that at present they do not yet
daunted by the volume of traffic on social media know how to maximise the use of social media.
and how to monitor and manage it. The relatively The lack of experience and confidence in utilising
recent emergence of social media means that many social media is highlighted by the fact that just
companies do not have the experience of dealing 8% of respondents were excited by social media
with a crisis when it occurs or plays out in the because they felt they could be a market leader
social media space. in this field. 28% of companies stated that they
are still exploring how to make best use of social
media. It is clear that while there is significant
One quarter of respondents are interest and excitement about social media within
daunted by the volume of traffic on the finance sector, firms do not currently feel
social media and how to monitor and qualified or have significant internal capacity to
manage it. be able to adequately manage it. Over time the
financial sector will build up its understanding and
experience by dealing with social media challenges
and monitoring the success and failures of its
competitors.
igure 10. The five financial sector fears of social media
F

38% of respondents are concerned
about social media because they
Brand lack the sufficient time and dedicated
Damage resource.

Resource Compliance

Measurement Expertise

17

21% of finance sector employees are 59% of respondents said that their
worried about social media because of firm was spending less than £50,000
compliance issues with the regulator. per year on social media and a further
29% are spending nothing.

As discussed earlier, many financial services As the financial sector begins to undertake more
firms hold concerns over compliance, with 27% adventurous social media strategies and embeds
stating that social media creates issues in this them into existing communication structures, this
area. A further 21% were worried by issues with will lead to increased costs, but potentially greater
the regulator, such as the Financial Services rewards. In a time of stretched communication
Authority (FSA). budgets, social media could prove to be a most
cost effective platform. However, it is essential to
The rapid emergence of social media as a business understand and measure the value and importance
tool has meant that many companies are still of any new investment. For many people working
attempting to understand how to make the most in the financial sector it seems that a concern
of, and understand the metrics for social media about how to measure the value of social media
and the Return On Investment (ROI). The challenge strategies exists, with over one third expressing
now is for the financial sector to understand how this concern. When asking respondents what the
to make the most of it by organising effective best methods of measuring the success of an
structures to utilise the opportunities across organisations social media strategy is there was no
their business. clear answer.
While 30% are excited by social media because it igure 11. Which of the following do you feel are the best
F
is deemed to be a cost effective form of marketing methods of measuring the success of an organisation’s
and advertising, there is a concern among a group social media strategy? (% respondents)
of respondents that to undertake a effective social
media strategy it will cost a significant amount. Message penetration 31.3
To date, investment in social media has been Click-throughs 31.3
relatively small, with 59% of firms surveyed Re-Tweets 27.5
spending less than £50,000 per year on it and 26.7
Twitter followers
29% spending nothing.
Sentiment analysis 24.4
Don't know 24.4
Share of voice 22.9
Mentions 22.9
Facebook fans/likes 20.6
Other 9.2
0 10 20 30 40
Percent


One third of respondents are worried
about how to measure the success of
social media activity.

If, as our research suggests, social media is It is clear that many within the financial sector still
becoming increasingly important in the financial hold a range of concerns about using social media
sector for communication strategies, it will be due to reputational issues or compliance issues.
paramount for companies to demonstrate the While this is to be expected, what is interesting is
ROI and how this supports business objectives. that for an industry that is normally so confident,
It is likely that different levels of management and the finance sector demonstrates a lack of
business divisions will have a range of performance confidence in making the most of the opportunities
indicators when assessing the success of a social that social media provides.
media campaign, and the chart above shows
that at present, people have extremely disparate
methods of measuring this. It is important for those
undertaking new strategies to understand the likely
metrics that different levels of the business will be
interested in. The chart “measuring social media
success across the business” provides an example
of how different hierarchies of a business are likely
to be interested in different metrics.

igure 12. Measuring social media success across the business
F

Role Metrics Specific Data

Senior Business Revenue,
management metrics reputation, ROI

Share of voice,
Management Social media support response,
teams analytics key message
delivery

Clicks, fans,
Community Engagement followers, RTs,
manager data views, members

19

How the financial sector
is currently using social media
The finance sector may have been behind the curve compared to other business
sectors but encouragingly 36% of those working in the financial sector state
that their organisation is using social media to supplement existing business
activity. A further 28% are currently exploring how they can use social media as
an organisation — encouragingly just over 10% of respondents said that their
organisations have fully integrated social media into their business strategies.

This emphasis on strategy is demonstrated by the the corporate affairs and PR office. The sales
fact that nearly half of firms surveyed want to have and marketing department also takes a role in
a clear online strategy in place in 12 months time, social media as well. It is encouraging that many
showing that the trend is certainly towards, not companies, have a lead department for social
away from, the digital space. media. But for an organisation to have a successful
approach to social media, it is essential that
The financial sector is beginning to embrace social their strategy is coordinated across departments
media and is building up the internal resources to ensure the feedback and response to it is
to manage it as one in five respondents said captured and distributed to the key business
that their organisation has a specific employee units. It is worrying to see that one in ten finance
or team responsible for social media. Thirty professionals we interviewed said social media
percent of financial firms are managing their social was managed in silos, within their organisation.
media strategy out of one department, usually

Figure 13. Current social media interaction

7% We do not use social media
3% We are interested
3% Don't know but do not have a social
media presence

11% As an organisation we do not yet know
how to maximise the use of social media

11% Social media is fully integrated 29% We are exploring how
into our business activity we can use social media

29%

36% We use social media
platforms to supplement
exisiting business activity 36%


30% of finance firms are managing
their social media strategy out of one
department, with this department
predominately being the corporate
affairs and PR office.

Our research demonstrates that a number of organisations to understand the opportunities
organisations are taking social media seriously and challenges that social media presents to
and are managing their social media through the their business. Our research displayed that over
CEO/Chairman’s office. Like many new business 40% of financial organisations have used external
ventures it is important to have senior buy-in to get consultants to help their company understand
projects off the ground and to drive them forward, the bigger picture. We found that 40% of financial
while also ensuring quick decision-making which, companies developed an interest in social media
is essential to social media projects. because they became aware that their brands
were being discussed online. This is obviously a
Understanding, building and implementing a key ongoing concern for the sector, as just under
social media strategy is a significant undertaking half of the individuals we surveyed said that their
for many organisations, especially when you organisation was using external consultants to
consider the challenges that the sector faces in monitor and listen to social media platforms on
embracing social media. As discussed earlier, there their behalf.
is currently a knowledge gap within some financial

Figure 14. Who holds responsibility for social media in your
organization? (% of respondents)

Corporate Affairs - PR 34.3
Sales and Marketing 22.9
Other 14.3
No specific department 11.4
CEO or Chairman's office 8.6
Internal Communications 3.6
Government Relations 1.4
Customer Service 0.7
Advertising 0.7
IT 0.7
HR 0.7
Legal and Compliance 0.7
Strategy 0
0 10 20 30 40
Percent

21

40% of finance companies developed
their interest in social media because
they grew aware that their brands
were being discussed online.

igure 15. How do external consultants support your
F
social media strategy? (% of respondents)

Monitoring social media platforms 47.4
Helping the organisation understand developments around social media 41.4
Managing the corporate social media page 33.1
Managing marketing campaigns on social media 27.1
Engaging with customers on social media 22.6
Purchasing advertising space on social media platforms 13.5

0 10 20 30 40 50 60
Percent

While consultants are being utilised to help using consultants to support their business in this
companies understand social media and what is field while they understand this new opportunity
being said about them online, those who already and the value that can be garnered by using social
have social media strategies in place are deploying media within. It is essential that when building
external consultants to engage with customers on and implementing a social media strategy that
social media, managing marketing campaigns and external and internal advisory teams engaged in
corporate social media accounts. Given the lack of social media and affected by social media are
experience and resources that many respondents sufficiently joined up. The chart below suggests
cited in terms of using social media within their the key business units that should be part of a
organisation, it is clear that the majority of firms are organisation’s social media team.

igure 16. Managing social media internally
F

Internal Social Media Advisory Team

C-Suite

IT Legal Corp Comms Sales / Marketing

Gov Relations PR Monitoring Legal

External Social Media Advisory Team


Social media and public policy

Social media has and will continue to revolutionise the relationship between business
and consumers. One area where we are starting to see change is how government
and citizens interact through social media. Nearly 40% of respondents in our
research were interested in social media because of its ability to influence public
debates. In 2011 we saw the use of social media platforms across the globe to
discuss, debate and campaign on a range of political and public issues, from the
Arab spring to Occupy Wall Street, UKUncut and the March for the Alternative.

Respondents to our research do not see the NGOs to date have been highly successful in
developments in 2011 as a one off, as 25% being able to utilise social media for campaigning
believes social media will be very important in the objectives on public policy issues. However,
development of public policy over the next five corporations are yet to really embrace this area.
years, while a further 50% see it as quite important. There is significant potential for organisations to
Less than 1% of respondents think it will not use social media by mobilising constituents to
be important at all. Social media is seen as so help lobby the Government and their MP around a
important in the next five years because it is as an particular issue. It will be interesting to see whether
effective way to quickly create a campaign around the financial sector and other business sectors will
an issue (55%), while it also allows for the views be using social media as a vehicle to drive changes
of the public to be quickly aggregated and fed into in public policy in future years. If appropriately
policy debates (56%). engaged and mobilised this could significantly
help organisations to achieve their public policy
A recent example of this can be seen from the objectives.
campaigning by the group 38 Degrees on the
selling of UK forests. The group quickly gathered
over 530,000 signatures and demonstrated public
opinion, which eventually helped influence the
government’s policy in this area. Over 30% of
respondents feel that social media allows for the
fast flow of information which can accelerate public
debates and make the issue more pressing.

igure 17. How does social media influence public policy? (%
F
of respondents)

Social media can quickly create a campaign on a relevant issue 56.3
Views of the public can be easily accessed and fed into the public debate by social media 55.6
Social media allows for a fast flow of information, and speeds up the pace of debate 31.7
Social media makes politicians more accountable to voters and stakeholders 18.3
Social media creates a volume of information that can make establishing facts difficult 14.3
I don't think social media can influence public policy debates 3.2
Don't know 5.6

0 10 20 30 40 50 60
Percent

Nearly 40% of respondents in our
research were interested in social
media because of its ability to influence
public debates.

23

Conclusions

Our research has revealed how an increasing number of firms in the financial sector
are beginning to take their heads out of the sand and explore the opportunities that
social media can offer. The initial reluctance within the financial sector is beginning
to fade with the sector now looking beyond the hurdle of compliance and the fear of
reputational damage.

The real challenge the financial sector faces is The financial sector haemorrhaged trust among
being able to implement a social media strategy the public during the financial crisis. Now social
that is appropriate, effective, manageable and media arguably offers the sector a real opportunity
measureable. By taking steps into the world of to rebuild its brands and trust among consumers.
social media, the sector will slowly ‘learn by doing’ By embracing social media, it will become more
and understand the opportunities available and responsive to changing consumer thoughts and
overcome the initial nervousness that seems to feelings.
have inhibited many companies from entering the
world of social media. The potential that social media offers the financial
sector is enormous and is only limited by the
Parts of the financial sector need to appreciate that sector’s creativity and bravery. For those who
firms may make mistakes and have their fingers embrace it, there are likely to be significant
burnt when implementing social media strategies. benefits; from understanding their customers
But without this learning experience they will and target market better, to revolutionary ways of
struggle to harness the enormous potential that communicating and developing new relationships
social media presents when they get it right. with customers. The challenge now for many in
the sector is to build the internal understanding,
appetite and ability to make the most of the
untapped potential that exists.


From reviewing the attitudes of those in finance, this has highlighted six
necessary steps that those working in the sector should undertake when
approaching social media.

6 steps to building a platform for success
in social media

1. Understand 4. Organise
At the outset of investigating the opportunity that Social media cuts across all aspects of a business,
social media offers it is paramount to research and therefore it is essential to have a dedicated team
understand how your target market want to be in place with senior management buy-in across
communicated to. the organisation.

2. Invest 5. Experiment
While social media can be a cost effective means Before launching social media across your
to improve brand awareness and consumer business, experiment on smaller more manageable
engagement, it does involve an investment of time, projects to build understanding, interest and buy in
resource and buy in from senior management. across your company.

3. Listen 6. Evaluate
It is essential before beginning any social media Always measure the impact of any social media
programme to listen to your target market to activity as this will highlight areas of success and
understand what they are saying about you areas for improvement and aid your organisation
online, your issues, products and competitors. in defining effective metrics for social media
This information will enable your organisation to investment.
understand your clients better and to tailor your
social media strategy accordingly.

25

About this report

The aim of this report is to provide an analysis of current perceptions
and future perspectives in the finance sector towards social media.

The research report is based on 158 online
interviews with senior decision makers from
the financial sector conducted in October and
November 2011. Respondents worked in a
variety of departments including the CEO’s office,
corporate communications, legal and compliance,
strategy, IT and government relations. The research
was global in its reach and captured perspectives
of finance professionals working across UK,
Continental Europe, North America, Asia and the
Middle East.

The research covered individuals working in the
following sectors of the financial services industry.

Asset Retail/Comm Investment Financial Accountancy
Management Banking Banking Advice and Audit

Regulator/
Academic Law Trade Body Consultancy
Government

References
1
http://blog.twitter.com/2010/02/measuring-tweets.html
2
https://www.facebook.com/press/info.php?timeline
3
http://blog.nielsen.com/nielsenwire/consumer/global-advertising
-consumers-trust-real-friends-and-virtual-strangers-the-most/
4
Bank of England Quarterly Bulletin, Q4 2011
5
http://www.guardian.co.uk/business/2011/dec/12/britain-ruled-by-banks


About Cicero Consulting
Cicero is the leading provider of financial
sector communications, offering global
coverage from offices in London, Brussels,
Washington and Singapore. Founded in
2000, Cicero offers public affairs, digital,
media relations, and research services to
more than 200 clients in over 20 countries
around the world.

About the Author
Chris Jackson is the Head of Cicero’s
Digital team. He works with clients in the
financial sector to help them understand the
opportunities and challenges presented by
new digital media. Chris has provided digital
counsel and strategic advice for a range of
global brands and bespoke organisations
in the finance sector, devising creative
engagement strategies to help clients
influence and interact in the digital debate
and social media conversations. In addition
to providing digital strategy he also produces
thought leadership reports for clients and has
recently supported the launch of the global
HSBC Future of Retirement report.

Chris has also successfully launched a
social media campaign that reached more
than half a million people across the UK,
the campaign saw Chris awarded the
Cosmopolitan Ultimate Man of the Year
award in 2011, as well as nominated for a
number of other awards.

Contact Chris for further information on
this report:

Chris Jackson, Head of Digital
Chris.Jackson@Cicero-Group.com
@cajackson1984
Tel: +44 (0) 20 7665 9540
Mob: +44 (0) 7910518384

27

Social Media in Finance January 2012

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