Having now worked in the financial services industry for four months†, I have begun to see that certain aspects of advertising simply don’t work for this sector*. Sometimes, this is for regulatory reasons such as insider trading or it offers an edge on competitors; other times it’s because the audience is looking elsewhere, such as industry-focused websites. Occasionally, it’s because the audience doesn’t understand the medium or just wants a top-level thought chucked their way, so they can glance at a headline and make decisions based upon what they read. Much like they do with their newspapers on the commuter trains.
And with that last point, well, you’d think that social media would be a boon in this industry. But it’s not. There are some reasons why this may be true:
Incentives – running competitions to engage an audience, well that’s not allowed. Simple as that. You can’t be seen, unless the regulator allows it, to give incentives for people to do certain things. Even member-get-member schemes are played down.
Unsuitable platforms – Facebook and Twitter might well be fine, but niche social networks such as Pinterest and Tumblr don’t cut it. Most likely they’re not on the radar of most of the clients within the financial sector – or such a small percentage that the likelihood that some of them will be the client of your investment bank or spread betting company is even smaller. Might as well buy a lottery ticket. Ditto Foursquare and other location-based services.
As an aside to this, enterprise social tools, such as Yammer and Salesforce’s Chatter don’t offer scope for third-party ads (they only focus on the business in which they’re used) or become an echo chamber within an echo chamber (I see conversation where someone posts something about how they’ve created an image which requires stakeholder feedback, only for replies and comments along the lines of: “Looks great”, “Good job!” and alike. This doesn’t bring any value to anyone whatsoever. And without value exchange, it’s like having a conversation in your head: useless.
Finance isn’t social – inherently, financial transactions and relationships are private and solitary. How often do you find yourself discussing your finances with your wider social graph? And as the bankers are shown to be more and more culpable in the economic mess we find our world mired in, so a private – or some would say, continued anti-social stance – is best. In fact, being nasty to bankers could well spawn its own social network well before many of the social tools we advertising people take for granted are adopted.
Information is a commodity – perhaps the most important difference between finance and other sectors is that information can be a hot property. It’s not a thing you want to share, as it gives you (or your company) an edge. Sharing it with a wider audience only serves to dilute the power of a piece of knowledge. Social media is useful when you want to amplify something, not if you want to keep things private.
Narrow subject focus – there are only so many things you can say about a particular financial service. Very quickly, it can get uninteresting – for both the audience and the company. And what if you only have one USP and no one thinking about how to exploit it in myriad ways? That’s like broadcasting magnolia as the paint of choice. As soon as someone with more colour options comes along, your customers will be looking at their swatches and not yours.
Some of the above points are generalisations I’ve made as I look at the social media platforms used to good effect in the financial company I’m employed by and those around us. I think the main reason is knowledge is power and information is a commodity that increases with value the fewer people know about it.
Perhaps private social networks could fare better in this industry, although this only opens up a small market, as once information has been released there is no way to keep it within the private social network boundaries.
And while I believe that social media has a place in the financial services industry beyond the retail outfits, it will take a brave step to make it work beyond a customer service tool.
†As a financial services n00b, I’ve made some considerable assumptions that others well entrenched in the sector can undoubtedly debunk.
*I’m not talking about retail financial services. Social, when done well, is often a great fit for financial brands with a retail focus.