How Social Media is Shaping the Financial Industry

Within just the past few years, we’ve witnessed consumer technology advance at an incredible pace. In contrast, however, digital marketing in the financial services industry has been extremely slow and has been struggling to keep up with ever-changing consumer behavior. Recent changes in government restrictions that regulate exactly how the financial world can communicate with the mass public should give this industry the much-needed push it has needed to take the social media plunge along with other industries. The SEC (Securities Exchange Commission) has also loosened its tight grip on the voice of the financial industry. Many banks and other MFSP (main financial service providers) are already succeeding on these popular platforms. Take Bank of America, for example.

This banking giant climbed aboard the leader in social networking on Facebook and is just shy of two million “likes” and growing fast. Their profile page addresses many important social issues, the support of our troops, community involvement, engagement with friends and families, even working with charities. Their continued success on Mr. Zuckerberg’s social site should be a role model for other financial institutions to follow.

What are other ways that social media will reshape the financial world? Which dangers are to be avoided in these relatively uncharted waters for new coming financiers?

Management and Monitoring

One of the most important aspects of engaging on social media is the importance of proactive management and effective monitoring on these platforms. Sharing is at the very core of these networking sites. The good, the bad and the ugly can go viral very quickly and has the potential of being seen by millions.

Looking at both sides of this coin, when a user posts something:

• POSITIVE: Acknowledge their compliment and reply with gratitude. Thank them for their patronage and for taking the time to leave their praise, recognize their suggestion, accept their advice, do whatever is necessary for them and the rest of their followers to see that you are paying attention and more importantly, responding.

• NEGATIVE: Address any issue as soon as possible and offer your immediate assistance along with a sincere and heartfelt apology. Don’t fear public acknowledgement of a complaint or problem. Everyone makes mistakes and everyone knows this, but more importantly, everyone will see that you are doing your very best to resolve the situation.

Customer feedback is very important and should be given the weight, attention and valuable recognition that it deserves.

Give Helpful Advice

Engaging on social media platforms is not really a very effective place to go after a hard sale, rather it is a great way to increase brand awareness and showcase a well-built reputation. One of the best ways of performing these tasks is to be viewed as a helpful advisor, rather than a hard-core salesperson.

The question isn’t “why” — but “how” — in this case.

Instead of presenting z scenario where you are pushing consumers into believing why they must choose your institution for their financial needs, it is better to simply offer them advice on how they can make better money-related decisions. These types of valuable tips and information are not only shared more often, they also leave a positive resonation with people who are likely to return for more advice and eventually become a customer.

Being social isn’t scary; it is exciting and rewarding. The financial sector will gain many new friends and followers online. With these new friendships along with their huge following, consumers will become better educated, more engaged and accepting of what this valuable financial sector has to offer the social world at large.

Dave Landry Jr. is an online business journalist, personal finance advisor and guest author whose writing covers business telecommunications, finance management and social media marketing. Connect with him on Twitter to find more of his work.