Despite social media being the fastest growing phenomenon in society over the past decade, financial institutions have been slowest to join the party. A partial reason for this is trust and the delicate environment they provide their services with confidentiality law getting stricter annually. However the underlying issue is that the products these companies offer are far more complicated than the average consumer product, for instance a pair of jeans that is easy to review.
The reason, we believe financial service products are complicated because that is how they are made out to be. They have several clauses associated with them and that isn’t even the biggest problem. It isn’t really possible to lure a consumer into buying with a 30% price slash. We reckon the biggest reason for financial services falling behind in the technological space is their lack of communication.
In a period where brand associations and perceptions are defined by what consumers make them out to be rather than the conventional era where brand impressions were forced on consumers and communication was autocratic, there is an increasing need for financial services to open their doors. Industries like Private Equity have been long known as vultures because of their secretive operations.
Following the financial meltdown in 2008, confidence has been key and evidently that has only been generated by communication. At least more so than stock exchange position. Let’s look at the Tesco for instance, at the time of the Horse Meat scandal, Tesco was able to apologise, talk to customers and win their confidence back whereas a company facing a similar issue to Tesco, called Findus Group (previously owned by Private Equity giant Lion Capital) was unable to do the same as their financial sector based owners refused to understand the power of social media.
We are not saying as with Tesco and Findus, financial services should start resolving PPI disputes via social media. However, it is about time that social media is used as a tool to generate interest about products. More so it can teach firms the art of understanding that consumer is king and understanding what the market end-consumers viewpoints are- paves the way for new products that will meet the needs of consumers in an ever-changing macro economy.
Furthermore, CSR employment can be shifted completely to the social space by running online social space webinars teaching aspiring analysts work related problems and ethics and providing them with in-house case studies. This in the long run will result in a wider pool of enhanced candidates that would make up the competitive edge of employees within a firm.
This scheme of social media activity could also be employed for pension seekers. Rather than have people working in offices, it may be more cost effective if the mode of advice was through generic social media messages. A personal touch could then be added by a live forum.
However, one thing that develops trust is the actual presence of an advisor physically in front of you and that is the only concern that financial institutions need to tackle. The rest remains upon the determination and the dedication of the financial sector to operate and communicate trust.
Content Creator: Faris Memon (Snob Monkey Content Creator)