Building Social Media Services for the Financial Services Industry

Very interesting article in ComputerWeekly about use of Social Media in Financial Services. A private meeting was held a few days ago where:

A behind closed-doors meeting of bankers, social media experts and technologists at The Financial Services Club last night revealed how the sector which traditionally leads technology innovation views social media technology. The event, held at the Lloyds building in London, delivered a clear message that banks must embrace social media. But work needs to be done by banks to work out how and where to use it.



There are some interesting quotes from it, I've tried to group the comments under the issues we see most commonly:

How Futureproof are the current tools:


- "Websites like Twitter and Facebook are just blips but it's what comes after that matters,"
- "Twitter is interesting but I do not know why. It is interesting because people are using it."
But banks know that what follows the likes of Twitter and Facebook will depend on how businesses develop the technology.



Rationale for Adoption.

- "Social media is the plumbing of collaboration."
- "Most businesses in this country are one-man bands and most of these are online. They would like to be able to run their businesses online including dealing with banks and the tax office for example."
- "Banks will have to get used to the idea that there will be some customers will want to use the web."
- "There will be a bonus for banks that experiment early with social media."
- "Social media is a good way of engaging with employees as well as customers."
- "A lot of it is total bollocks."
- "Once a customer question has been answered by a corporate through a social media site it doesn't have to be re-answered again and again."
- "In 1923 the head of the Post Office said he could not see any uses for a telephone apart form calling servants."



Barriers to Adoption

- "If you want to adopt social media you need to listen to what people are saying about it by monitoring online discussions."
- "Businesses can facilitate customer services through social media but it is not the answer to everything."
- "If the way to make money out of social media was obvious Facebook would be doing it."
- "Banks can't experimented because of heavy regulations."
- "I am not certain [banks] are in a position to use social media credible."


Concerns

"We do not deny that this technology will be used by us but to do this will require things we do not know."
- "In financial services we are still in the educational phase."
- "The designed for purpose of technology in banks is never the purpose it is put to."
- "We might make a product designed for loans and it could end up being used for payments."



Options for Small Acorns (starter projects)

- "Banks could start working with third parties for technology because it is hard to change legacy systems."
- "Corporates are already monitoring data feeds to see what people are talking about through mechanical scanning of social media feeds."
- "How does social media transfer to the corporate context is what banks are trying to understand. There has to be a new way found for doing this."
- "Two banks ask me to build a community for them every week."



We have put in a major social media strategy for one Financial Services company already, and would reflect that many of these concerns are very valid - it is not a simple transfer from the low security, non transactional consumer world to a financial service environment with its much more stringent requirements. (Twitterers are the first to call #FAIL on banks that are perceived to have made a mistake, that should convince you of that).

Also, quite bluntly a fair bit of the consumer technology is just not up to the thrashing / hard conditions it will get in a business environment (or struggles to integrate etc). You need serious Open Source gear like Drupal, and sometimes need to build your own on top of the LAMP stack unless its fr fairly low risk usage.

And, of course as any person with systems implementation experience in the last 30 years will tell you, the technology is a minority sport compared to data integrity, workflow rationalisation, people change management and training, and management support. Social media doesn't escape any of these social problems.

Also, many of the metrics that you can get digitally do not easily transfer to business value - quite a lot of work required (Its not just us that found this, MeasurementCamp in London was set up for this exact reason)

The benefits are quite wide reaching though, from higher customer acquisition and lower churn, improvement in SEO, better ability to acquire advertising and get better rates (lots of work, though). But its non trivial to get this and needs time, its not a plug and play thing.