Social media has mainly been a marketing effort in financial services, and many firms are not tracking ROI. Yet, some are deriving value from analysis of social data, whether it's sentiment analysis for trading or credit risk in lending.
Financial services institutions treat social media as a marketing and branding effort, but the next phase is integrating social data into business strategy and customer analysis, according to executives at the InformationWeek Financial Services/Dell Think Tank roundtable event on Tuesday.
The potential for social media across an organization is large, but customers have not aligned their business objectives with their social objectives. Theyve just gotten rolled up into we have to be on Facebook and Twitter, said Sean Breen, director, banking practice at Dell Services at the InformationWeek Financial Services/Dell Think Tank roundtable held on Tuesday in New York.
Its really important to be aligned with a business strategy, which is when you uncover business value, whether its reducing call center costs, or increasing your product development quality, or increasing customer satisfaction. It could be any one of those metrics, so you are just not doing tech for technology sense, but always aligning it with the business, argued Breen.
Almost half (48%) of the respondents to the UBM Tech survey released on Tuesday said the social media responsibility rests within their marketing organizations. The survey of 300 professionals in banking, insurance, and capital markets found that social media is at a transition point. A minority of financial services firms are starting to explore and invest in the broader concept of a social enterprise to derive social intelligence from customer data, the study said.
In fact, a minority of firms have begun setting up command centers that enable centralized management and monitoring of social media across the organization, to seek revenue and cost benefits.
At Wells Fargo & Company, social media resides in the marketing department, but the firm is applying it across the business and geographies. Were seeing a transition in putting social back into the business, said Kelli Carlson, VP, social engagement leader, wholesale social strategy at Wells Fargo & Company, who spoke on the Getting Social panel at the Financial Services Think Tank (#DoMoreFSIT) live event this week. The bank has an inside-out strategy to integrate social across all of its business units and geographies. With 300,000 employees, Wells Fargo has a command center in three locations, with 72 sources coming in where it monitors the traffic.
Recruiting is one area where Carlson sees potential for social media to pay off. The bank is using social media to talk about the new positions or jobs that it has. Theres a big war on right now in finding the top talent in the financial industry, so using social is going to get us in the forefront of gaining that top talent, said Carlson.
However, the study found that the typical social media effort at financial institutions is a marketing-led initiative with simple uses and low expectations. In terms of which divisions use social media, 80% answered marketing. Relying on it as a communications tool, 67% of participants listed company news, 49% cited community news, 48% advertising, and 48% announcements.
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Financial Services Institutions Gear Up for Social Intelligence