Social Media in Financial Services: The Keys to Success

By Amy Mcilwain

Social

More than 5 million high net worth people in North America are using social media to assist with financial decision-making, according to LinkedIn. For financial advisors, social media represents a direct channel to their current and potential clients at a crucial time in their financial journeys.

Indeed, 85 percent of financial advisors are already using social media for business, according to the 2016 Putnam Advisor Social Media Survey. Of these “social advisors,” 80 percent attribute gaining new clients to social media—for a median asset gain of $1.9 million.

As the global industry principal of financial services for Hootsuite, I continue to see two major challenges in particular that organizations in the financial services industry must overcome in order to use social media to its full potential: adhering to compliance requirements and protecting the safety of their firm and customers against threats. Here’s how to address those challenges—and how to capitalize on the opportunities that lay beyond them.


Bonus: Get Hootsuite’s Social Media Trends Report for Financial Services, which examines industry trends and tracks how global banks, financial brands, and insurance companies are increasing their reach and revenue on social media channels.

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The challenges of social media in financial services (and how to address them)

Challenge: Regulatory compliance

Compliance has traditionally been an obstacle for social media adoption in financial services. However, technology and education have both proven to be instrumental in overcoming this barrier.

The U.S. Security Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) guidelines categorize social media content into two buckets: static content and interactive content.

When it comes to static content, it is considered the same as an advertisement and requires compliance pre-approval.

Interactive content, on the other hand, is considered the same as a presentation in front of a live group of investors. Interactive content does not require pre-approval, but it does require archiving and post-review.

While each company’s compliance team ultimately determines what they consider to be static versus interactive, you’ll find that more often than not, the majority of social media posts and discussions will fall into the interactive category. But be sure to check with your compliance department for specific firm rules.

When it comes to archiving, the sheer volume and variety of social media communications creates its own challenges. How do you archive all of this content and importantly—retain the context of the conversations taking place to provide the full historical picture?

Another consideration is the growing number of advisors and agents—many working remotely—who use social media to post and share content and engage with customers and prospects. Implementing processes and tools you can scale across your organization is critical to maintaining a compliant social media presence.

Solution: Stay compliant on social media by using automated pre-publishing screening and archiving tools

With the advancement of technology, more and more firms are moving from pre-review to post-review for the majority of social media content. Tools like Hootsuite, in conjunction with our compliance partners, such as Actiance—the leader in communications compliance, archiving, and analytics—provide pre-publishing guardrails. These include the ability to flag and reroute posts containing words such as “guarantee” or “free” before posts even go live. You can also automatically moderate your social channels in real-time for inappropriate or non compliant content.

Our Actiance integration lets you centrally manage and reduce risk. You can easily implement compliance processes, workflows, and policies across the organization— including remote agents and advisors. And automated archiving saves every social communication to a secure, searchable, context-aware cloud archive.

This lets you not only meet regulatory requirements and retain access to the full context around all your social conversations, but also gain insights into them by analyzing what is captured.

Training in these tools is the key to successful, organization-wide social compliance. Hootsuite can also provide industry-specific training that not only increases advisor adoption, but provides the foundation for FINRA and SEC compliance requirements.

Challenge: Security threats

Hackers, targeted phishing, social engineering, account takeovers, piracy, fraud—being active on social media comes with just as many risks for businesses as it does opportunities. And in an industry such as financial services where wealth transfer is regularly occurring, these risks can have especially serious and far-reaching consequences.

According to IBM, 60 percent of all cyber attacks were carried out by insiders—meaning anyone who has physical or remote access to a company’s assets. And one-third of those attacks were carried out by “inadvertent actors,” which IBM defines as “typically well-meaning employees (or other insiders) who either mistakenly allow an attacker access to your data or fail to pay attention to your company’s cyber security policies.” This means that the biggest risk to your company may very well be your own employees.

Solution 1: Invest in training and eduction

Education is one of the most effective ways to safeguard against non-malicious employee error, especially when it comes to social media. Educating employees means walking them through your organization’s formal social media policies and crisis communication plans, how to use secure social media tools, and how to spot security risks like unsafe links or accounts.

Solution 2: Use the right tools

Secure tools and collaboration platforms can also help your firm stay safe on social media. For example, Hootsuite’s double approval system prevents mistakenly posting to the wrong account, reducing the risk of employee error.

You can also control employee permissions, giving each team member the appropriate access to publish to social networks on your firm’s behalf, while maintaining a centralized source of control and security. And if there’s ever any suspicious activity on your account, Hootsuite can send you real-time security notifications to ensure you’ve got ample time to proactively address the threat before it’s too late.

The opportunities for social media in financial services

Having your bases covered when it comes to compliance and security on social media means you can explore the opportunities that these platforms offer without having to worry as much about potential repercussions. Here are a few of the key opportunities I see for financial services firms on social media:

Uncover money in motion events through listening

Companies that are doing well on social media are realizing the power of listening. Social media is a conversation, and you really need to listen first and talk second. Too often I’ve seen companies jump on social media and start spouting the same monologue they use offline. That’s not going to work. The real value of social media is in the listening and intelligence gathering. So for example, advisors are automatically alerted on LinkedIn whenever a contact is promoted or changes jobs. This provides an opportunity to reach out during critical money in motion events such as 401k rollovers.

Empower executives and employees on social

Many organizations have moved beyond using social media as merely a communication channel to become full-fledged social enterprises. They’ve realized that it’s not just about the company having a voice, it’s about empowering executives and employees as brand ambassadors. Whether that’s done by getting the CEO and the faces of the organization to start blogging, or having them get involved on Twitter and LinkedIn—an active executive presence on social media does wonders in humanizing the brand.

Again, education is key. You can’t just launch a software tool and expect adoption. Social Media is something that advisors need to learn. And the deeper their understanding, the more they’re going to realize this is a shortcut that saves time rather than one extra thing on their plate.

Establish and strengthen relationships that can lead to revenue

It’s important to set the right mindset for engaging on social media. While the actual sale won’t happen on social media, it can definitely happen as a result of it.

For example, let’s say you go on LinkedIn and connect with a client. You can look and see who they’re connected with, and then ask for an introduction when you next have a meeting with that client. Think of LinkedIn as your modern day rolodex—it’s a great way to potentially double your referrals through social media.

Don’t expect to measure the ROI of social media in terms of the specific dollar amount of new assets under management. Instead, your definition of success should be focused more on relationship-building goals. For example: “This week I’m going to have five phone calls as a result of connections I’ve made on LinkedIn.” This is a much more valuable and realistic way of using social media and measuring its impact.

Hootsuite and Actiance makes it easy for advisors, marketers, and sales professionals to stay compliant on social media while driving revenue, decreasing operational expenses, and managing risk.

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