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Social Media in Financial Services 2010

Datamonitor
February 22, 2010
56 Pages - SKU: DFMN2607420

Abstract Table of Contents Search inside this report Related Reports

Introduction

Fast paced advancements in web technology and the rise of social media have now given vast amounts of power to the consumer, which has huge implications for acquisition and retention. This report dispels some myths commonly held by FS providers surrounding social media's reach, purpose and value, and also highlights the dangers associated with a lack of adoption.

Scope

Using extensive secondary and primary research, recent trends in social media and consumer appetites for its use in the FS space are identified
Identification, and in-depth analysis, of assumptions commonly held by FS providers regarding social media's reach, purpose and value
Discussion of the dangers associated with lack of adoption
Provision of concrete actions for FS providers to take in order to integrate social media into a holistic retention strategy

Highlights

In a world where social media is now hard to get away from, it is vital that FS providers acknowledge that it is no longer an option not to get involved with this medium in some way. Consumers are identifying with this channel above all other online services, so FS providers must increase their visibility here in order to be noticed.

In light of the extent to which the value of customer relationships can be influenced through this channel, and that 'trust breeds trust', as it were, by the same token it is vital that providers understand the volatility of trust as a concept and how easily it can be broken through misuse of personal information

Whilst it is clear that this channel remains the most popular source of advice amongst Generations X and Y, it is clear that the greatest growth is being seen in the older demographic segments, given their fast increasing awareness and the emergence of more tools to with cater to them.

Reasons to Purchase

This report provides key insights into the opportunities presented by the social media platform and threats if ignored or misused.
Primary and secondary data is used to profile how providers are, or are not, using the medium to their advantage, and highlight missed opportunities.
The report provides actionable strategies as to how social media can be harnessed to better relate to consumers and boost long-term profitability.

Overview: Catalyst; Summary; Methodology; Table of Contents; Table of figures; Table of tables
INTRODUCTION: Digital networks are now more extensive than physical ones, and this has impacted consumer attitudes towards information; The reach of social media knows no boundaries; The reach of social media is truly global; FS providers hold false beliefs about the value of social media; Myth: Social media is a fad; Myth: Social media has limited appeal beyond younger demographic segments; Myth: Information shared via social media can only have limited impact; Social media may not directly drive sales, but still adds value; Sales will be driven through viral marketing; Another reality: Social media will not solve all problems; Not all consumers are online and not all have the fast connections required for some elements of social media
THE FUTURE DECODED: Trend: Social media permeates every part of consumers' day to day lives; Social media is now the most popular online activity; Time spent on social media varies from country to country; Insight: Consumers are already using social media for their financial needs; Online media is the most popular source of financial advice for consumers in the US, BRIC and APAC; Key takeout: consumers are using social media therefore providers need to at least increase their visibility; Insight: Social media is developing quickly and aligning with consumers' needs; Social media is fundamentally challenging previously held beliefs surrounding consumer behavior; Power has shifted from businesses to consumers; Social media is breaking down privacy barriers which have typically shrouded consumers' personal financial situations; Key takeout: nothing can be taken for granted with social media; consumer demands will continue to surprise; Insight: Consumers are revealing huge amounts of information through social media; The global nature of social media creates an opportunity in terms of information available; The value and amount of feedback consumers are able to give is much greater than that previously recorded; Consumers are keen to offer this qualitative information directly to providers, but currently lack the platform to do so; All information can be utilized; Technology is only part of the solution; A holistic approach combining technology and culture is key; Key takeout: FS providers must recognize the value of a customer-centric approach; Positive brand perceptions are key to improving customer retention and recommendations; Key takeout: providers must beware of a backlash if they misuse consumers' personal information; Trend: Social media is no longer the reserve of the younger generation; Growth of Twitter usage in the workplace also highlights social media's increasingly professional reach; Insight: Adults are using social media to help with financial decisions just as much as youngsters; The popularity of online resources as an aid to financial decision making is evident in all segments; Online resources for aiding financial decisions are used most by the 25-34 segment in almost all regions; Online resources are more popular than traditional sources of advice for 18-34 year olds; Price comparison sites, in particular, are as readily accepted by older consumers as they are by younger ones; The rise of financial account aggregators has contributed to the popularity of the online channel in aiding consumers' personal financial management across all segments; Key takeout: FS providers must not assume social media is only useful for targeting Generations X and Y; Trend: Social media can be very damaging if ignored; Insight: Higher accessibility to product recommendations mean FS providers have to work harder to retain customers; Those who favor online media are more likely to investigate other products in the next six months; Insight: Widespread negative publicity has the potential to do serious damage if not counteracted; 'People power' should not be underestimated; Key takeout: FS providers must remember consumers talk about the very good or the very bad
ACTION POINTS: ACTION: Social media must be at the centre of banks' communication strategies; Integrate technological data-mining techniques and social media to create a holistic customer retention strategy; Any social media strategy is worthless unless accompanied by a committed company culture; Motivate your employees; Reward your employees; Engage your employees the same way you expect to engage your consumers; ACTION: Banks must find their place in the 'new community'; Transparency and community building are important in building trust; Social media is not just for smaller, more agile players; there is social media to suit all
APPENDIX: Additional data; Methodology; Further reading; Ask the analyst; Datamonitor consulting; Disclaimer
List of Tables: Table 1: Social media audience and time consumption by country; Table 2: Sources of advice by country; Table 3: Indication of receptiveness to the online channel for financial advice, by country; Table 4: Indication of receptiveness to the online channel for financial advice, by age; Table 5: Indication of receptiveness to the online channel for financial advice amongst different age segments, by region; Table 6: Indication of receptiveness to different channel for financial advice, by age; Table 7: Consumers who have bought products via a price comparison site in the last six months, by age; Table 8: Impact of different advice sources on likelihood of investigating other products in the next six months
List of Figures: Figure 1: Digital networks are now bigger than physical ones; Figure 2: Social media's reach is global; Figure 3: FS providers hold false beliefs about the value of social media; Figure 4: Social media's reach is vast; Figure 5: Social media can boost sales; Figure 6: Social media permeates every part of network users' day to day lives; Figure 7: Time spent on social media has increased year on year; Figure 8: Time spent on social media varies from country to country; Figure 9: Consumers have revealed the online channel's usefulness in making financial decisions; Figure 10: Online media is the most popular source of financial advice for consumers in the US, BRIC and APAC; Figure 11: Blippy has proved that social media has fundamentally changed consumer behavior and broken down privacy barriers; Figure 12: Providing a page where customers could provide feedback would most improve brand perceptions; Figure 13: First Direct has pioneering in the FS space in terms of feedback gathering; Figure 14: Consumers with greater trust are less likely to switch; Figure 15: 18-24 year olds are under-represented at Twitter (while the 25-34 year old segment is over-represented); Figure 16: 25-54 year olds have driven Twitter growth; Figure 17: Growth of Twitter usage in the workplace also highlights social media's increasingly professional reach; Figure 18: Adults are using social media to help with financial decisions just as much as much as youngsters; Figure 19: Online media is most popular amongst the 25-34 segment in almost all regions; Figure 20: Online resources are the most popular source of advice for FS amongst 18-34 year olds; Figure 21: 35-49 year olds top price comparison site usage figures; Figure 22: The rise of financial account aggregators has contributed to the popularity of the online channel; Figure 23: Recommendations from personal acquaintances or opinions posted by consumers online are the most trusted forms of advertising; Figure 24: Those who favor online media are more likely to investigate other products in the next six months; Figure 25: Campaigns such as 'Move Your Money' highlight how social media can be used against banks; Figure 26: Stop HBOS in the UK also threatens the bank's reputation; Figure 27: Social media must integrate itself and interplay with all other channels in order to add value; Figure 28: Any social media strategy is worthless unless accompanied by a committed company culture; Figure 29: It is clear that Coca-Cola 'gets' social media; Figure 30: Being a Mobank customer is very much like being part of the 'in group'

Social Media in Financial Services 2010

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