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Social Media in Financial Services

Published: March 2010

Social Media in Financial Services

Social Media in Financial Services will help you to understand social media and its potential to enhance customer engagement. The report details the key success factors in deploying these tools, the challenges for implementing them in the financial marketplace and practical ways to overcome them. Learn through best-practice case studies how the market leaders are using social media to increase their customers' brand loyalty.



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Since the publication of 'Web 2.0 in Financial Services' , social media has become an established part of the marketing and product mix.

In developed FS markets, social media is poised to leapfrog the call centre and stand second only to the branch as the most important customer channel. In many emerging markets it is set to lead the branch.

This report uses non-public domain data and exclusive interviews to provide a comprehensive analysis of global best practice in social media and retail finance, including:

  • The mixed experiences of banks operating in virtual worlds
  • Understanding, assessing and mitigating the risks from social media
  • Integrating social media with other delivery channels
  • The growing role of social media in wealth management
  • Social media as an internal communication, HR and training tool

Case studies and examples involving; ANZ, American Express, Barclaycard, Deutsche Bank, Royal Bank of Canada and Toyota Financial Services.

This report assesses the changing role of social media in cards and payments, retail financial services and wealth management. Far more than any other medium, social media (also referred to as Web 2.0 and User Generated Content) with its emphasis on interactivity and collaboration, gives consumers a platform for their voice to be heard. It allows for an incredibly high level of engagement, important for an industry that was for a long time focused on improving customer service through incremental operational improvements.

This report examines how a variety of tools can be deployed by banks to improve outcomes in all aspects of bank strategy and operations across:

  • Customer services
  • Marketing
  • Market research
  • Product development
  • PR

It provides a comprehensive set of case studies of best practice financial services institutions, in addition to non financial organisations that are using social media. The report also discusses the challenges that banks face in leveraging web social media and applications that are still best treated with caution.

Web 2.0 in Financial Services, published by VRL in 2008 reported that:

'Financial services institutions have been somewhat slower than other industries to embrace web 2.0…..the main reasons are aversion to the operational, compliance, and reputation risks that come with employees’ use of the media and the proliferation of consumer-generated content, and that it is a new and unknown medium.'

At this point social media was most widely used by mutual and community banks. However in the two years that have followed, banks worldwide have ramped up their usage of social media, although given the rate of change in social media as whole, financial services organisations still lag industry best practice.

The most striking changes that have occurred in this period include:

  • An exponential increase in the level of online commerce
  • Hundreds of millions of additional users to sites such as Facebook and Twitter
  • The increasing functionality and sophistication of payment tools used on these social networking sites
  • The increased importance of social media accessed via mobile devices
  • The widespread adoption of financial management tools
  • The increased usage of social media as a training tool

However not all finance and social media initiatives have flourished. P2P Lending in spite of a call to arms by the media has not yet had the success predicted and has run into serious regulatory problems. Very few banks now operate in 'Virtual Worlds' and there is still strong resistance to using social media amongst key banking segments. However in spite of these issues social media has become an established part of the financial marketing and product mix.

Overall financial services still lag behind the level of best practice established by other industries, in particular from the FMCGs.

Structure of this report

This report assesses best practice in the development of social media thus far.

Part 1 reviews the case for using web 2.0 as a customer engagement tool.

Part 2 considers the opportunities available from the application of social media, to HR training and learning within organisations. Essentially, the key to new media is the aspect of communities working together - often without meeting or even knowing each other - to build something. This spirit of collaboration helps create Wikis, in a model that can be brought in house if required and used as a shared knowledge tool for the whole organisation.

Part 3 assesses the most commonly used social networking tools: Blogs and podcasts are easy to establish and are often the starting point for a social media strategy. As reported in Web 2.0 in Financial Services:

‘They give the company a human voice and are a useful channel for sharing information and ideas and receiving feedback. However, unless a blog or podcast series is launched for a time limited campaign it can represents an open-ended commitment. The biggest challenge remains providing regular content that is informative or entertaining for readers.’

Since the publication of Web 2.0 in Financial Services, blog functionality has increased hugely and the usage of video blogging is now becoming widespread. The popularity of social networking sites has been one of the most powerful cultural phenomenons of the past few years. The first edition of this report commented that ‘financial services had been unable to launch successful proactive initiatives as users were too engrossed in communicating with their friends to be responsive to advertising’…the initiatives that have been successful have been in the context of multimedia marketing campaigns. This edition focuses on the damage that can be done to an organisation as a result of negative PR campaigns conducted via social networking sites. It also looks at the role of social networking as part of a segmentation analysis, in particular with regards to affluent and aspiring high net worth individuals

Online communities are a valuable resource for engaging customers and gathering feedback and market insights. In this they have many advantages over traditional surveys and focus groups. Public communities are typically focused on the small business segment and traditionally have had limited success.

Integrating personal financial management (PFM) solutions into a bank’s website offers a number of potential benefits in engaging customers, helping them reach their financial goals, and better understanding their needs. With a growing demand from customers for these services no financial services provider can afford to ignore them. They also have an important role to play as part of a financial education strategy.

This section allows reviews the usage and effectiveness of bank developed phone apps.

Part 4 considers the factors needed to create a successful social media 'voice'. It also looks at the role of P2P lending and why this has not had to date the impact originally forecast.

Findings of the report include:

  • Financial services organisations still lag behind business best practice in the usage of social media
  • Many organisations are still failing to accurately measure returns on social media activity
  • Social media has become one of the most cost effective tools for training, learning and organisational development
  • The future channel for social media is increasingly with mobile devices


Executive summary


Section I – The case for using web 2.0 to build customer engagement

Chapter 1 – Social media and customer interaction

Chapter 2 – Customer engagement and social media in customer service

Chapter 3 – Customer engagement and social media in marketing

  • The declining effectiveness of traditional marketing
  • Word-of-mouth marketing and web 2.0

Chapter 4 – Customer engagement and social media in market research and product development

Section II - Social media as a tool for employee engagement and interaction

Chapter 5 – Knowledge and training

  • Corporate intranets
  • Key success indicators for knowledge management in intranets:
  • Case study: INsite, RBC Financial Group
  • Blogs
  • Blogging best practices
  • Managing internal wikis
  • Key success indicators for internal wikis
  • Case study: BT
  • Participation fosters trust
  • Podcasts and video technology
  • The case for podcasting
  • Video technology

Chapter 6 - Risk management and employers

  • Managing risks of employees using social media
  • Employees interacting with consumers

Section III Social media tools for customer engagement

Chapter 7 - Blogs

  • The case for corporate blogging
  • Blogging best practices

Chapter 8 - Podcasts

  • The case for podcasting
  • Podcasting best practices
  • Case studies
  • ANZ podcasts
  • Summary

Chapter 9 - Social networking sites

  • Viral marketing in social networks
  • Marketing in social networks
  • Facebook
  • Case studies

Chapter 10 – Online personal financial management (PFM) tools

  • Bank interest in online PFM tools
  • Consumer Demand
  • The case for online PFM tools
  • Is online PFM a threat to a bank’s business?

Section III – Success factors in engaging customers with web 2.0

Chapter 11 – Authenticity

  • Supporting web 2.0 campaigns with real customer engagement at the operational level
  • Avoiding ‘corporate speak’
  • Finding the right sales approach
  • Making the message consistent with the brand


  • Peer to Peer Communities
  • Offering a more satisfying customer experience?
  • What drives P2P lending?
  • Catering to the ‘long tail’ of the consumer loan market
  • Customising products
  • Customising credit approval criteria
  • Leveraging social networking tools to scale relationship lending
  • The trend towards transactional lending
  • Hybrid models blending P2P and traditional lending
  • P2P lending in credit counselling programmes
  • The friends and family approach
  • Partnering with financial institutions
  • Referral partnerships
  • White label partnerships

Case Studies:

  • ANZ
  • American Express
  • Bankinter
  • Barclaycard
  • Citibank
  • Credit Mutuel
  • Deutsche Bank
  • Fidelity
  • Forum Credit Union
  • HSBC
  • ING Direct
  • Garanti Bank
  • Gulf Bank
  • Key Point Credit Union
  • Royal Bank of Canada
  • Saxo Bank
  • Toyota Financial Services
  • Verity Credit Union

View full Summary Report

To order a copy of this report:

- contact us by email

- call Jeannie on +44 (0) 20 7563 5640

VRL publishes around 30 in-depth reports every year. Containing proprietary data, in-depth analysis and considered intelligence, VRL reports review the most pressing issues and trends impacting on the world of finance and cover a broad range of topics. These reports are compiled by associate editors, who are specialists in their field and contain original, previously unpublished content, based on fact and expert opinion. VRL reports provide the analytical intelligence needed to make informed business decisions in a concise and cost-effective manner, and often negate the need to incur costly external consultancy services.

In a recent customer survey on reports, conducted by VRL, 92% of respondents stated that VRL reports give access to information that is otherwise difficult or time-consuming to acquire. 93% said it gave them a good overview or summary of market developments. Overall 83% rated quality of information as excellent or very good and content and scope of coverage was rated at 94% and 82% respectively


Retail Banking Products:


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Retail Banking/Payments Asia Roundtable, detailed subject matter TBC, Hosted by Titien Ahmad, VRL Asia-Pacific, and Hugh Fasken, Editor, Retail Banker International, August 2010


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