The use of social media in financial services organizations is no longer an option. The University of Massachusetts Dartmouth Center for Marketing Research found nearly all Fortune 500 financial services organizations have active social media profiles.
At the advisor level, Putnam Retail Management found 84% use social media for finance industry business. Ninety-two percent of them said social media has helped them gain new clients.
The average asset gain for financial advisors using social media was $1.4 million in the 12 months before the Putnam survey. The most effective advisors using social media in financial services increased assets under management by 10% in just a year.
Is your financial services organization using social media effectively? If not, you’re losing business to your competitors.
Of course, finding new clients is not the only benefit of social media. And at the same time, there can be plenty of challenges to using social media in a regulated industry. Here’s everything you need to know about developing a social media strategy for financial services in 2020.
Bonus: Download Hootsuite’s annual report on social media trends for financial services and insurance in 2019. Get access to internal benchmarking data for 100+ organizations, extensive interviews with industry experts, and more.
The use of social media in financial services: 5 key benefits
Let’s take a look at some of the important benefits of social media beyond new client acquisition.
1. Get key industry insights
Try using social media for financial services industry research. This is a key way to stay on top of what’s happening in your field. Whether it’s a competitor’s latest product offering or an impending PR disaster, think of social media as an early warning system.
You can learn an incredible amount from what other people (and brands) post on their social media accounts. You can use this particular social media strategy for financial services firms even if you’re not yet sure what you should post on your own accounts. (We’ll tackle that challenge below.)
With social media listening you can learn what’s happening with your competitors, your customers, and your industry. You can see reactions and challenges with new regulations in real time. And you can even see what the “online mood” is about your company and your competitors.
Going deeper, you can start to identify pain points that your products and services might be able to address. Or, maybe you’ll spot common questions that you could answer in a blog or video post.
2. Build brand awareness
Photos and videos are the most common types of Facebook posts for Fortune 500 financial services firms. Instead of driving traffic, financial services brands are using social media to build brand awareness.
This aligns with findings from a Hootsuite survey of financial services marketers, in which more than half (53%) of them said that brand awareness content was their best-performing content type.
Remember that the use of social media in financial services extends well beyond looking for the sale. The first step is getting your name out there. You want to be front of mind when potential new clients are ready to seek out a new financial services firm.
For example, social media can be a great way to extend the reach of event sponsorships. This can build brand awareness among an audience that may not see your ads in the newspaper or on TV.
Chase uses social media creatively to increase awareness of its sports sponsorships. They use live social video and partner with pro athletes to drive conversation using Twitter hashtags.
— Chase (@Chase) August 26, 2019
They also showcase charitable partnerships, again making use of popular hashtags to raise brand awareness.
To celebrate #MakeADogsDay we teamed up with @delawarehumane to invite all you dog lovers to do something special for your furry friend. Have a ????? We’d love to meet it. Snap a photo and share how you’re celebrating today. pic.twitter.com/xVlcaIK12Y
— Chase (@Chase) October 22, 2019
3. Strengthen relationships
Building relationships is one of the most important uses of social media for finance professionals. When it comes to money, everyone wants to deal with someone they know and trust. Social media can help you build that trust.
Interacting with new prospects online is known as social selling. Here’s a quick primer on how it works:
Social media alerts can help you identify important moments in the financial lives of your clients and prospects. For example, LinkedIn is a great place to learn about career changes or retirements.
Social selling is about building relationships that lead to sales in the long term. So, when one of your connections gets a new job, send a congratulations message to keep yourself top of mind. But don’t jump in and try to make a direct sale.
4. Humanize your brand
People want to deal with trusted financial experts. That doesn’t mean they want their financial services providers to be clinical and cold. Social media provides a great opportunity for you to humanize your brand.
For example, Canada’s Tangerine Bank hosts regular #MoneySavvy Twitter chats. These tackle subjects of financial literacy—and they don’t shy away from personal topics.
Q7. Are you on the same page with your partner about money matters? How do you talk to your partner about money, and when do you think couples should have their first talk? #MoneySavvy pic.twitter.com/VH4MqeTvvo
— Tangerine (@TangerineBank) November 13, 2019
Getting your company’s executives on social media can also be a great way to humanize your brand. After all, it can be easier to trust a person rather than an institution.
C-level executives don’t have to stick to dry financial topics. Encourage them to show a bit of personality. Look at Jack Salzwedel, Chair and CEO of American Family Mutual Insurance Company. When he tweets his support for a local contestant on The Voice, he’s making himself human and relatable.
— Jack Salzwedel (@AmFamJack) November 7, 2019
He also shares posts that highlight the company’s charitable and community initiatives.
Bonus: Download Hootsuite’s annual report on social media trends for financial services and insurance in 2019. Get access to internal benchmarking data for 100+ organizations, extensive interviews with industry experts, and more.Download the report now!
5. Reduce efforts and costs
A Hootsuite survey found 41% of financial services and insurance brands are at the strategic stage of social maturity. Social media use is no longer limited to the marketing department.
Plus, these firms understand how social efforts are driving real business results. Teams and departments are using social media in a coordinated way. Most likely, this involves a shared social media management platform.
A consolidated social media strategy also helps improve your company’s analytics and data. At the same time, it reduces costs.
MAPFRE is a global insurance company with more than 80 official social media accounts. First, they consolidated account management in Hootsuite. Then, they implemented a content library. This made it easy for regional teams to access approved content and assets, reducing duplicate efforts and approvals.
They also started identifying duplicate requests submitted through more than one channel. This reduced customer service efforts and cost.
In less than a year, MAPFRE saw social engagement rise by more than 31%.
Social media in finance 2020 benchmarks
In partnership with Unmetric, Hootsuite analyzed the social media profiles of all Fortune 500 financial and insurance brands. Here are the industry average followers for each social network. Use these to benchmark your own progress:
Financial services industry average fans: 1.69 million
Top brand: Visa, 23.16 million fans
As we said above, brand-building photo and video posts are the most common use of social media in financial services. Visa is right on trend with this video post.
Financial services industry average followers: 38,595
Top brand: American Express, 386,000 followers
View this post on Instagram
This week we're exploring Lynnhurst, #Minneapolis, a neighborhood south of the city's center. Local eatery @wholesumkitchen offers an array of health-focused food choices from smoothies and juices, to soups, salads and more. Owner, Evan Tepper started Whole Sum as a food truck and settled down in Lynnhurst because of the warm community, including many small business owners who live and work in the neighborhood. When Evan was building his business, he says welcoming American Express "Just made sense!" because of its value to both local and business customers. #AmexWelcomed
This post is a typical example of how American Express uses Instagram. They highlight cardholder benefits. They showcase businesses where people can use their American Express cards. This creates a sense of community among fans and business partners.
Financial services industry average followers: 168,936
Top brand: Citigroup, 915,900 followers
— Citi (@Citi) November 18, 2019
On Twitter, Citigroup shares content relevant to both industry experts and Citi customers.
Financial services industry average followers: 1,850,734
Top brand: Citigroup, 2.19 million followers
On LinkedIn, Citigroup includes more business-oriented content. This is no surprise, since LinkedIn is a business-oriented social network. Citi posts about recruiting programs, mentoring, and other information relevant to potential employees.
Financial services industry average subscribers: 22,896
Top brand: Wells Fargo, 284,000 subscribers
Wells Fargo shares many kinds of content on YouTube. Sometimes they share financial outlook reports, sometimes budgeting advice.
They also create web series to keep subscribers coming back. The latest, Empowerful, spotlights young entrepreneurs who have used Wells Fargo products.
Social media strategy for financial services: 5 essential tips
1. Focus on compliance
FINRA, FCA, FFIEC, IIROC, SEC, PCI, AMF, GDPR—all the compliance requirements can make your head spin.
Many advisors and agents now work remotely. It’s critical to have compliance processes and tools to guide their use of social media.
Get your compliance team involved as you develop your social media strategy. They’ll have important guidance on the steps you need to take to protect your brand.
For example, they can explain separating personal and business use of social media. They should also weigh in on what kinds of links advisors share.
It’s also important to have the right chain of approvals in place for all social media posts. For example, FINRA states: “A registered principal must review prior to use any social media site that an associated person intends to use for business.”
2. Archive everything
This falls under compliance, but it’s important enough that it’s worth calling out on its own. According to FINRA, “firms and their registered representatives must retain records of communications related to their “’business as such.’”
Those records must be kept for at least three years.
Hootsuite’s integration with Actiance automatically archives all social media communications and stores them in a secure and searchable database, complete with the original context.
3. Conduct a social media audit
In a social media audit, you document all your company’s social channels in one place. You also note any key information relevant to each. At the same time, you will hunt down any impostor or unofficial accounts so you can have those shut down.
Start by listing all the accounts your internal team uses regularly. But remember—this is just a starting point. You’ll need to look for old or abandoned accounts and department-specific accounts.
While you’re at it, make note of the social platforms where you don’t have any social accounts. It might be time to register profiles there. Even if you’re not ready to use those tools yet, you might want to reserve your brand handles for future use.
SIX is a Swiss finance company. When they conducted a social media audit, they discovered 80 unofficial social media accounts. Among them were dozens of fake accounts on Facebook. Fake accounts create significant risk for financial companies, and can erode public trust.
SIX had the 80 fake accounts shut down. Now, they automatically watch for non-compliant, malicious, and fake content using ZeroFOX. SIX gets 30 to 40 automated alerts every month and initiates one or two content takedowns.
We created a free social media audit template to help keep all your research organized as you tackle this work.
4. Implement a social media policy
A social media policy is a living document. It guides social media use within your organization. That includes accounts for your advisors and agents.
Your compliance, legal, IT, information security, human resources, public relations, and marketing teams should all have input into this document. It will help you maintain a consistent brand identity while reducing compliance challenges.
It will also define team roles and approval structures so everyone understands the workflow of a social post. This clarity upfront can help reduce frustrations that social media in financial services might not move as quickly as it does in other industries.
Using social media for finance industry purposes can also come with security risks. Be sure to include a section in your social media policy that outlines security protocols for the less-sexy aspects of social media. For example, prescribe how often to change passwords and how often software should be updated.
5. Commit to doing it right
The Putnam survey found that an active presence is a critical component of a social media marketing strategy for financial service accounts.
Simply creating a social profile is not enough. Zero percent of the advisors who have only a passive presence on social media gained new assets through social channels.
Compare that to the highest achievers. They brought in average new assets under management of $15.3 million. Eighty percent of those high achievers pay for a premium level of service on a social network, rather than sticking only to free tools.
Training is also an important factor. The high-achieving advisors were much more likely to have received training. They learned from colleagues or a consultant, rather than figuring out how to use social tools by themselves.
Don’t think you need training? Consider that 61% of those Putnam surveyed identified themselves as social media experts. However, Putnam found only 15% of them really were.
And when you’re ready to take your social strategy to the next level, we have the tools to help…
Hootsuite makes social marketing easy for financial service professionals. From a single dashboard you can manage all your networks, drive revenue, mitigate risk, and stay compliant. See the platform in action.