subject: Social Media in Financial Services 2010 - Market Research Report On Aarkstore Enterprise [print this page] Introduction 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.
Table of Contents :
Overview 1
Catalyst 1
Summary 1
Methodology 1
Table of Contents 2
Table of figures 3
Table of tables 4
INTRODUCTION 5
Digital networks are now more extensive than physical ones, and this has impacted consumer attitudes towards information 5
The reach of social media knows no boundaries 6
The reach of social media is truly global 6
FS providers hold false beliefs about the value of social media 8
Myth: Social media is a fad 8
Myth: Social media has limited appeal beyond younger demographic segments 9
Myth: Information shared via social media can only have limited impact 10
Social media may not directly drive sales, but still adds value 10
Sales will be driven through viral marketing 10
Another reality: Social media will not solve all problems 12
Not all consumers are online and not all have the fast connections required for some elements of social media 12
THE FUTURE DECODED 13
Trend: Social media permeates every part of consumers' day to day lives 13
Social media is now the most popular online activity 14
Time spent on social media varies from country to country 15
Insight: Consumers are already using social media for their financial needs 16
Online media is the most popular source of financial advice for consumers in the US, BRIC and APAC 17
Key takeout: consumers are using social media therefore providers need to at least increase their visibility 18
Insight: Social media is developing quickly and aligning with consumers' needs 18
Social media is fundamentally challenging previously held beliefs surrounding consumer behavior 19
Power has shifted from businesses to consumers 19
Social media is breaking down privacy barriers which have typically shrouded consumers' personal financial situations 19
Key takeout: nothing can be taken for granted with social media; consumer demands will continue to surprise 20
Insight: Consumers are revealing huge amounts of information through social media 21
The global nature of social media creates an opportunity in terms of information available 21
The value and amount of feedback consumers are able to give is much greater than that previously recorded 21
Consumers are keen to offer this qualitative information directly to providers, but currently lack the platform to do so 21
All information can be utilized 23
Technology is only part of the solution 24
A holistic approach combining technology and culture is key 24
Key takeout: FS providers must recognize the value of a customer-centric approach 24
Positive brand perceptions are key to improving customer retention and recommendations 25
Key takeout: providers must beware of a backlash if they misuse consumers' personal information 25
Trend: Social media is no longer the reserve of the younger generation 26
Growth of Twitter usage in the workplace also highlights social media's increasingly professional reach 28
Insight: Adults are using social media to help with financial decisions just as much as youngsters 29
The popularity of online resources as an aid to financial decision making is evident in all segments 29
Online resources for aiding financial decisions are used most by the 25-34 segment in almost all regions 30
Online resources are more popular than traditional sources of advice for 18-34 year olds 31
Price comparison sites, in particular, are as readily accepted by older consumers as they are by younger ones 32
The rise of financial account aggregators has contributed to the popularity of the online channel in aiding consumers' personal financial management across all segments 33
Key takeout: FS providers must not assume social media is only useful for targeting Generations X and Y 34
Trend: Social media can be very damaging if ignored 35
Insight: Higher accessibility to product recommendations mean FS providers have to work harder to retain customers 35
Those who favor online media are more likely to investigate other products in the next six months 36
Insight: Widespread negative publicity has the potential to do serious damage if not counteracted 37
'People power' should not be underestimated 37
Key takeout: FS providers must remember consumers talk about the very good or the very bad 40
ACTION POINTS 41
ACTION: Social media must be at the centre of banks' communication strategies 41
Integrate technological data-mining techniques and social media to create a holistic customer retention strategy 42
Any social media strategy is worthless unless accompanied by a committed company culture 42
Motivate your employees 43
Reward your employees 44
Engage your employees the same way you expect to engage your consumers 44
ACTION: Banks must find their place in the 'new community' 46
Transparency and community building are important in building trust 47
Social media is not just for smaller, more agile players; there is social media to suit all 48
