Four Ways to Rethink Social Media in the Financial Services Industry
This post was also published on FinTECHTalents
The COVID-19 pandemic has done more than shake up the way we live our daily lives. It’s magnified major gaps in the financial services industry, particularly how financial institutions connect, engage, and communicate with customers online through social media.
Before the pandemic, banks and credit unions leveraged social media marketing to some extent. A 2019 study, ‘The State of Social Media in Banking’, revealed that 40% of banks have participated in social media use for the last five years or more, while only 3% responded that they do not use social media at all.
By March, consumers flocked to social media as they were suddenly struck with job worries, business shutdowns, market turmoil, and threats to public health and safety. Shelter-in-place orders made it more convenient for consumers to go online for information as well, challenging financial organizations to pivot away from in-person connections or risk losing market share.
FinTech companies like Venmo, Braintree, and Acorns have raised the standard for financial institutions to make banking, lending, investing, and payments a customer-centric digital experience for end users. Social media must do the same through effective communication, education, and humanization of its brands. The most innovative banks and credit unions are shedding the traditional suit-and-tie persona typical of financial organizations and instead showcasing a modern and relatable brand personality on social media.
As our digital, financial, and personal worlds collide, social media will reign as a critical tool for banks and credit unions to mitigate the fears, concerns, and digital experiences that consumers demand.
Here are a few ways to leverage social media more effectively in 2020.
Conduct Market Research
The largest social media platforms today – Facebook, Instagram, Twitter, Pinterest, and LinkedIn – are a treasure trove of market data. Financial institutions can glean powerful insights into its communities, competitors, and prospects with the sophisticated built-in tools and advanced analytics on these social platforms.
By harnessing data analytics and ‘social listening’, financial institutions can uncover current customer pain points, likely amplified by the pandemic, analyze overall sentiment and expectations, and gain a deeper understanding of what is missing from your company’s overall messaging.
Foster Open Dialogue
The mandatory shutdowns across the country revealed a critical need for more digital connections and open communication between financial institutions and its customers. The opportunities for ongoing dialogue on social media are abundant, yet most financial firms treat social media like an ongoing monologue.
When the markets tanked and unemployment skyrocketed overnight, many consumers panicked. One report cited more than a quarter of Americans who withdrew funds from a retirement account this year to cover basic necessities did so after losing their jobs due to the pandemic. Even more concerning is how little Americans had in savings at all. FinTech company, SimpleWise, reported that half of Americans who were furloughed or laid off this year had less than $500 saved for retirement.
Now imagine being a financial advisory firm forced to shut down due to Coronavirus. Social media becomes a key component for communicating with current and prospect customers who are actively seeking information about retirement and savings in a crisis.
On Instagram, this might look like providing educational resources in the Highlights section, sharing financial advice on IGTV or Stories, and connecting prospects with financial advisors through the DMs (Direct Message). On Pinterest, that same educational content can live on Pinterest boards with titles like “How to Cover Basic Necessities if You’ve Lost Your Job” or “Retirement Savings Tips during a Recession.” The same content can be repurposed on YouTube where a Community Manager can foster conversations with viewers through the comments section and share helpful resources that show consumers your organization is listening and actively participating.
Attract New Customers and Turn Followers into Fans
In order to use social media effectively, financial services organizations must look at ways to attract new customers and turn them into loyal fans. Just how effective is social media for lead generation?
A 2018 study found that out of 1,021 financial advisors, social media helped 92% acquire new clients. There are multiple ways this could happen for your organization. First, social media can act like a referral source for many brands. Consumers tend to trust word-of-mouth marketing from someone they know, like friends or family, more than they do ads, websites, and other push marketing tactics. If a bank’s services are talked about and shared positively on social media, you are more likely to attract a new customer.
Second, social media fosters strong communities, and strong communities lead to customer acquisition. The stronger – not bigger – and more engaged your community is on a social platform, the higher your success rate will be to convert followers into customers and fans. As digital marketer Neil Patel puts it: “Social customer acquisition isn’t about being on every platform possible, it’s about choosing the right platform(s) for your demographic and building a strong community.”
Develop a Digital Infrastructure
At Wells Fargo, social media isn’t just a tactic, it’s a fully staffed, intelligent command center. The bank has spent several years building up its social media marketing infrastructure to better understand its core business, customers, and marketing partners. At the heart of this structure is what all big banks and credit unions should strive for – getting to know its customers on a deeper level and tailoring the company’s story so that it matches customers’ needs.
With a strong team in place, financial firms can establish its voice and message on various social platforms, partner with influencers, conduct contests, and break into video. Financial organizations that have yet to allocate resources towards a digital marketing team will continue to miss out on valuable opportunities to attract leads and keep clients happy.
Citi, the fourth largest bank in the U.S., can credit social media for helping the organization bounce back after the 2008 recession. Today, the company’s social media presence is well thought out and organized. For example, the company tweets several times a day about its products, services, and often shares its “social good” initiatives. It also has a separate customer service account (@AskCiti), which is targeted directly to consumers and gives them a way to connect with the brand.
Since the pandemic, consumers have been looking for reassurance, connection, and direction regarding money, loans, payments, and investing. It’s clear that there’s a strong appetite for digital connections, services, and products from financial organizations. How financial organizations use social media during this volatile period in history will have an impact on whether or not customers stick around or flee. It will also determine which organizations bounce back from this economic crisis.