05 Mar Is Social Media Evolving into Its Final Form? The Distributive Mechanism Of The Internet Experience
Two weeks on from Facebook outlining their plans to consolidate their three messaging platforms Facebook Messenger, Instagram and WhatsApp, the business world continues to grapple with the potential implications. Each app garners the attention of circa 1.3 billion users, with the ability for users to engage in cross-platform communication by 2020. As a result, the volume of people that businesses have access could grow significantly larger. Whether these apps will adapt to Facebook Messenger’s profit driving ad format or incorporate WhatsApp’s subtler ad placement remains to seen. What is known is that Facebook will still need to satiate the desire for ever more important ad revenue. Yet what remains is the growing opportunity for both businesses and social media platforms to benefit from consolidated, evolving and ever more connected means of communicating with customers. Yet with trust in both social media & the financial sector often in short supply, stumbling blocks remain over how such opportunities can be seized.
Does this have the potential to disrupt the current status quo in the financial industry? The ability to target content and inherit the technological advances Facebook has made in this area (such as in-bedding adverts in live streaming) provides a great opportunity for these companies. More comprehensive marketing techniques, that are surrounding a prospecting customer over many different platforms, along with useful innovations in the financial functionality will help regain customer trust in a sector that has struggled with this issue.
Looking across to our Chinese counterparts at WeChat, coined “the app for everything” by Forbes. WeChat has now become the default platform for communication, purchasing and reviewing app for billions of users. One key feature that has been adopted by over 600 million users is WeChat Pay. This app is used to make payments on and offline and users can even pay their bills through the platform. Careful marketing and the introduction of smart functionality such as the ability to send the traditional red envelopes over Chinese New Year has led to this app being dubbed as one of the potential challengers to the payment powerhouses (Visa and Mastercard).
One of the big focuses for 2019 that we’re likely to see is on the maturation of social media usage in this market. More and more the financial sector understanding the importance of social media as part of their marketing and customer service offering. However, producing content is easy; producing engaging content is far more challenging. Not only this, companies are moving beyond the newsfeed and looking at their social media campaigns at a far more granular level. Gradually plugging the dark social gap and placing as much importance on social analytics as they would their website.
A large driver behind this shift is that we are all becoming smarter with how we share data online. Slowly the public is shifting away from over-sharing on social accounts and being far more selective with what we’re putting into the world. There is a clear shift in people’s newsfeeds, from both public and companies alike. Moving away from sharing content to consuming content. Interactions between users are increasingly being taken out of the public domain, instead moving their conversations to private messaging facilities.
The social media marketing campaigns that are seeing the strongest results are those which are using technological developments to their advantage. Creating highly personalised, very relevant campaigns allow large companies to speak to consumers on a one-to-one basis, amending their approach to match each customer’s individual requirements.
Increasingly often, companies in the finance sector are including social media as part of their digital marketing strategies as well as their customer service package. Once believed to be a young man’s game dominated by the banking disruptors such as Monzo and peer-to-peer lenders, the more established banks are now moving into this space. From a business point-of-view, potential customers remain to be inputting a huge amount of data into these platforms, allowing for very granular, very effective customer targeting campaigns.
Banks are now able to use advanced data science techniques to tailor their products and recommendations to pre-defined customer segments. For example, identifying customer likely to be of high net-wealth and offering them stock accounts and wealth management versus a help to buy ISA that they may be promoted to first-time buyers.
From a sales perspective, we are seeing sales professionals adopt content marketing to advertise their offerings and assert their authority in a given field. Spending the first two years of my business life running social selling campaigns for clients and the results were incredible. The commercial arm of any business will rely on its sales team being present on social media platforms such as LinkedIn. The platform offers a goldmine of opportunity for those that understand how to use it.
The reigns of content production can no longer be held by the social media marketer themselves. In fact, the best content on social is often peer created. People far prefer hearing the views of their peers, rather than businesses. This can be clearly seen in the shift away from price being the primary decision leader to ratings and reviews from other customers. One group of consumers taking advantage of this shift is Financial advisors. With a more visible face than banks, the opinions and recommendations of this industry often have a little more weight online.
Interestingly, the larger institutions may have found a weapon to combat this consumer desire. We are seeing the C-Suite taking a visible part in publishing content on social platforms. A great example of this is found with Nik Storonsky, the CEO of Revolut. Heavily active on social platforms, not a week goes by without hearing an opinion or receiving information from the business’ leader. This not only provides a great marketing opportunity from a highly-regarded voice of authority but also gives customers a look behind the curtain to get a taste of what this company is truly like. A couple of years ago, using a CEO for marketing would have been considered far-fetched however nowadays this is being thought of as a great PR opportunity.
From Defence to Offence
The financial sector is still regaining the public’s trust following the global financial crisis. This paired with the recent data scandals that impacted Facebook and Cambridge Analytica, it could be reasoned that the sector faces challenges that may not affect other industries. Understandably, people are extremely cautious with whom they trust with their personal finances. And with banking and insurance often being essential, as opposed to luxury retail purchases, companies offering amazing customer service and experience often outperform those offering better value for money.
Interestingly, as much as this is a challenge for this industry it is also a great opportunity. Social media provides companies with a unique opportunity to speak to customers on a one-to-one basis. Long has the finance sector struggled with its public appearance. With interactions traditionally being largely transactional, the public often didn’t form a close bond with their bank. These platforms allow companies to converse on a more personal level and show the public what they stand for. A good example of this is found with Lloyds Bank’s campaign designed to break mental health taboos, proving that the institutions that are doing this well are seeing incredible, sometimes viral, results.
Furthermore, challenger banks and insurers such as Monzo and Starling are ditching the traditional bank vernacular in exchange for a more conversational approach. With banks implementing chatbots and social messaging as another channel for customers to get in touch, consumers are now being offered a bridge into a faceless industry. This allows people to get in touch with banks using the same methods that they would contact friends and families.
Another topic to be investigated is the impacts of technology in the coming year. More advanced data science techniques mean that banks and insurers can provide a more effortless experience. We have seen insurers import their quote applications into Facebook messenger, using big data analyses to strip out irrelevant questions and improve their pricing models. On the banking front, we are seeing applications such as Plum, which are able to work out how much a customer can afford to save and doing this automatically for them at regular intervals. Given the move to open banking that is coming to the start of 2019, we can be confident that offerings in this area will quickly develop.
Alongside these technological advances offer this industry unique risks. The vast quantities of data that the public is uploading about themselves potentially offer a significant risk. Knowing a great deal of intimate information about a target opens them and companies up to risks of fraud and abuse. This is forcing the industry to develop more and more sophisticated for customers to authenticate themselves. These have included facial and speech recognition as well as advanced two-factor login processes. Moving into the coming year we can be confident that the techniques used by hackers will become more intricate, leading to a race between hackers and banking institutions.
2019 offers a wealth of opportunity, and much for customers and financial institutions to be excited about. A chance to further update the image of sometimes centuries-old organisations and a means to drive the profitability of insurance underwriting. This all should be entered with great caution, as we have seen several potential new risks on the horizon spanning not only crime but also companies’ reputation.
Learn more about Social Media in Finance at www.smif19.com