Over the past few years, investment in social media by the financial sector grew steadily; by Q4 2011, 22 percent of companies in the financial services sector were investing in social. Why, then, the precipitous drop to just 6 percent in the second quarter of this year?
This is what Anthony Cooper, MD of business intelligence company Pearlfinders, set out to explore in a blog post based on this curious finding from the Q2 2012 Pearlfinders Index.
Financial services firms certainly have unique challenges in social and several incidents over the past year point to the reality that they just don’t understand how to effectively manage those challenges yet. Barclays, NatWest, and HSBC all had their feet held to the fire recently over their respective handling of controversies.
There is great potential for negative sentiment towards banks, investment companies, and other financial services firms, given events such as bonuses for executives, accusations of impropriety, allegations of money laundering, and more.
Cooper explains what he found in a recent experiment: “Running six of the major high-street banks through social media monitoring software (Lloyds TSB, Barclays, RBS, HSBC, Co-operative and NatWest) reveals over 170,000 mentions on Twitter alone in the past 30 days. However, negative posts were twice as common as positive ones.”
Social media marketing will continue as a delicate subject for financial services firms, though Cooper expects to see the downward trend in investment in social turn around by the end of the year. He believes firms are holding out until they understand the platforms better, but haven’t rejected social media marketing entirely.
It could be a great opportunity for agencies and marketers who understand the risks and nuances inherent to the financial services industry. Cooper notes, “It will be about convincing traditional financial services companies that openness with the public will help build the trust that is lacking in the sector.”
Banks need to lead the social media conversation, he explains; they just haven’t quite figured out how to do so yet.