Why the financial sector should ‘bank’ on social media in 2013

Last week, we ran a joint workshop with Skipton and Keighley-based Solicitors AWB Charlesworth (hopefully the first of many!) for local professionals in the banking and finance sector. The workshop was designed to persuade attendees that they should ‘bank’ on social media in 2013, whilst being aware of the legal pitfalls and framework.

The workshop was attended by a mixture of people working at a local/regional level for large banks, Independent Financial Advisers and accountants. All had dabbled with social media before the session but they were concerned about issues such as client confidentiality and what they could say online within the tight regulatory framework in which they operate.

From initial feedback, we like to think that we converted most of the people in the room to the power of social media as a business development and professional relationship building tool – and allayed some of their fears about how not to fall foul of the potential risks to banking and finance professionals. Here are some of the things that were discussed:

Overcoming the banking sector’s reputation crisis

The banking sector is going through a major reputation crisis. Whilst social media exacerbates this in many ways, the biggest risk is not being part of the conversation! HSBC chose to ignore what customers from around the world were saying about them on Facebook and just set up their own ‘polished’ corporate page. But, in the banking and finance sector, ‘people buy people’ and you have to engage on an individual level. When it comes to things like mis-selling, social media offers a huge opportunity to simplify financial advice and products and talk about them in simple terms by listening to and engaging with potential customers on their level.

Social media as a customer insight tool

Social media for banking and finance professionals is as much about watching and listening as it is about talking. Twitter and LinkedIn can be used for research to keep on top of the latest trends and understand what your customers are thinking and feeling. They also allow you to identify and engage with intermediaries and other professionals who you may otherwise not come across, helping to building relationships, trust and credibility from third party endorsement. Liz Smith, a local Business Manager at Nat West who attended the workshop, uses Twitter to re-tweet and share updates about her customers’ businesses without specifically saying who she works for or what she does (see @libbysmith13).

Corporate brand vs personal brand

Others at the workshop who worked for big banks were concerned about stepping out of the parameters of the stringent social media policies of their employers by using social media for individual professional use. We discussed how they could develop their own personal brand within the context of the organisation they work for to leverage their own expertise and contacts for the benefit of themselves and their employer.

Using social media to work smarter, not harder

Banking and finance professionals working in a competitive, busy marketplace were also understandably concerned that building and managing effective social media channels would take up too much of their time. We explained our approach to social media, which is all about quality, not quantity. We believe that, used effectively, social media can help finance professionals work smarter, not harder by allowing them to stay ‘front of mind’ with their clients, customers and contacts and speak to them in simple terms that they can easily understand. There are also ways to maximise the time you do spend online by tapping into topical conversations and using the right keywords. In fact, the more niche and specific you are on social media, the easier it is to engage with people. You don’t need to try and be ‘all things to all men’ and you certainly don’t need to be tweeting all day long and broadcasting messages ‘at’ people. You can also maximise what you do ‘offline’. For example, the research you do into the delegate list before an event and the follow you do afterwards.

The potential legal pitfalls of social media for banking and finance professionals

Of course there are risks when it comes to social media, particularly for banking and finance professionals who are bound by so much regulation. AWB Charlesworth’s Managing Partner April Chamberlain highlighted some major gaffes in relation to slander, libel and plain old ‘putting your foot in it’ on social media to illustrate what can happen. This helped to instill a ‘think before you tweet’ mantra and re-enforced what we’d said about quality, not quantity.

Protecting yourself against the risks of social media

AWB Charlesworth’s advice on how to protect yourself against the legal pitfalls was simple. Much of it is common business sense. Either carefully read your employer’s social media policy or, if you are a small business owner, put a social media policy in place that is aligned to the professional code of ethics/regulation to which you already have to adhere. Then make sure that everyone understands and is bought into the policy by consulting them on it and communicating it effectively. Many have adopted a ‘buddy scheme’ that helps people ‘sense check’ what they are putting out there with colleagues who understand the professional framework.

We hope that 2013 is the year that the banking and finance sector embraces social media!

 

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