FreshNetworks Blog

When I head out to conferences and seminars, the value for me often is not so much in the content of the event itself, but more with the surprising people you meet and their great stories and anecdotes about social media.

One such person that I met was Roberto Hortal Munoz, the eBusiness Director for RSA Emerging Markets.  He has a great interest in social media for financial services and over a brief lunchtime chat he told me about Poland’s first financial services social networking game, “National Driving Test”, that was created by  Link4 – part of the RSA group and the market leader for direct insurance in Poland.

RSA’s National Driving Test game was launched in February this year on Poland’s equivalent of Facebook, Nasza-Klasa. Nasza-Klasa has 14 million active members and 16 million online users.

The Driving Test  game works by asking players 10 questions about driving habits and their knowledge of  car insurance. Players are allocated a driver profile depending on the response to their question. The six different driver profiles are inspired by, and aligned to, RSA’s consumer segmentation. The driver profile badge is displayed on their page for all their friends to see:

Depending on the player’s answers at the end of the game the player is then directed to relevant, targeted RSA insurance product information that relates to the answers they have given during the game.

So in a fun, engaging way the game serves to highlight the benefits of Link4′s driving insurance.  It’s obviously working as Link4′s  social driving game has achieved some great headline results, including 10,000  users requesting an insurance quote during the first seven days of going live.

You can read more about the campaign, as well as find more information about Roberto Hortal Munoz, on his blog at www.hortal.com.

Interested in social media case studies? Want to get practical advice about corporate social media use?

Why not attend the Corporate Social Media Summit Europe on 17th -18th November 2010 in London and get exclusive insights into how brands like Vodafone, Cadbury’s and Nokia are using social media for real business benefits.

We’ve already looked at two of the key topics  from our social media in financial services round table event (niche communities and customer driven markets) and now it’s time to move on to a topic that comes up time and again in relation to the financial services industry – the issue of transparency.

The current situation

Matt Colebrook, CEO of First Direct bank, defines transparency in 2 ways:

1. People need to feel secure and know that their money is protected – part of this is knowing what banks and other financial services institutions are doing with it.
2. Clear, simple fee structures  and products that are easy to understand and help people make sure they know what they are signing up for.

While the conversational, sharing mentality of social media has enabled this information to exist intrinsically, albeit on a small scale, very few financial institutions are hosting open discussion platforms for customers and investors because of data and security restrictions.

A recent survey from the Institute for Private Investors (IPI) has shown that high net worth investors are integrating social media into their lives more than ever before. The survey, conducted in May this year, found that 38% percent of respondents actively participate in social media, such as Facebook, LinkedIn, Twitter, forums and blogs.

Other recent studies indicate that wealth management clients are increasingly using social media to compare notes on advisors, funds, fees, strategies and deals.  And according to the findings from a report in the Harvard Business Review in June, private equity firms, venture capital and private investors are also using social networks to discuss industry related information.

Whether social media use of this kind actually exposes bad practices and forces better levels of transparency is debatable. However, the increased use of social media in the financial services industry certainly highlights the need for greater transparency online in order to stay ahead of the game.

What does the future hold?

The willingness to engage in open conversation through social media is vitally important for building trust in today’s world. In the future, customers will need an increased level of disclosure, peer review and transparency from their financial services providers, and social media offers the perfect medium by which to do this.

A recent article in Computer Weekly highlights that when new modes of social media interaction intersect with the regulatory demands for transparency, it will form essential part of how financial services function online. Failures in transparency (like the Madoff scandal) will be challenged more robustly and at an earlier stage as customer and investor decisions will be predicated on better practice, better communication and clearer fee and product structures.

Transparency through social media may even take the form of something similar to what  Saffron building society do. The Chief Executive, Andy Golding, writes his own blog offering his views on Saffron news and the industry as a whole, as we all communicating with Saffron’s members and staff, in order to develop a level of transparency.

Yes, Saffron is a relatively small institution but perhaps Golding’s activity is what’s needed in order for financial services brands to retain and acquire new customers and investors in the future.

Our next blog post will look at the risks and regulations surrounding the use of social media in the financial services industry and what the future holds for the sector.

As we’ve already looked at the increase in niche online communities and how this could impact the future role of social media in financial services, this blog post will look at another key topic from our senior level executive round table event: customer driven markets.

The current situation

With the rise of social media, financial service businesses have started to think less about controlling their brand and more about how they manage their presence on the social web.

Social media and online communities have given consumers the opportunity to easily discuss online what they want, and don’t want, from a product or service.  In this way, the consumer is slowly but surely influencing the market place.

In general, financial services brands have been somewhat slow on the uptake when it comes to letting their consumers dictate their offering. There is one area of the industry that has taken this on board, though it’s a relatively new emergent in the market – social lending.

Social lending sites like Zopa and Prosper are consumer focused online marketplaces. Members of these communities borrow and lend money to eachother, avoiding  traditional banks and ensuring that the consumers themselves have more control over the transaction, as well as giving competitive interest rates.

Zopa, for example,  also has a place for members to meet up and discuss all things Zopa – be it lending tactics, where they see Zopa going in the future, or even what they don’t like about the site. This allows Zopa to tap in directly to their customer’s needs, helping them shape their offering based around the demands of the customer.

What does the future hold?

More and more financial services brands will learn to embrace their customer’s opinions and realise that they are shaping the market place.

Reviews, blogs, forums, and tips and advice sections will appear more frequently on both branded and non-branded sites and the financial services industry will realise the value of not just listening to, but also acting on their customer’s conversations and suggestions.

Sites like Zopa are already challenging and reducing the market place of the more traditional lenders. As more and more social-based entrants emerge, this reduction is likely to continue unless financial service institutions get more creative in how they address the needs of their customers.

A good example, from another industry, of where things are heading for financial services could be the Patientslikeme site. Patients like me is an independent community for patients who are suffering from illnesses. It is a place to share information about their conditions and treatments, providing support for other patients. Traditionally this advice comes from hospitals, doctors or other traditional medical sites like the NHS, not an independent community of people.

What’s more, with  over 80,000 unique visitors a month and 65,000+ members, patientslike me is used by pharmaceutical companies as a source of reliable consumer insight; it is helping to shape the pharma marketplace.

Could something like patientslikeme be the future direction for financial services brands? Perhaps independent communities of people, where the site is built by the community itself, discussing, say, loan options, will influence the financial services market place by providing valuable, actionable consumer insight to financial services brands. It remains to be seen…

Our next blog post will look at the issue of transparency in relation to social media and the financial services industry.

We recently held a senior executive round table for a small group of financial services brands in order to debate the future role of social media in financial services.

As we’ve developed the social media strategies for several financial services organisations, including business divisions of  LV=,  Royal Bank of Scotland, LloydsTSB, American Express and SNS Bank, our aim was to facilitate an open discussion about the future direction of social media among senior level decision makers from the financial services industry in a relaxed, informal environment.

Registered attendees included senior executives from American Express, Credit Suisse, Friends Provident, Homeserve plc, ING Direct, Investec, Lloyd’s of London, Moneysupermarket, More Than, Simply Business and UBS.

On the day 11 people turned up to join in what turned out to be a very lively discussion about social media.

Charlie Osmond, FreshNetworks co-founder and Strategy Director, kicked off proceedings by introducing some of the  leading social media case studies in the  industry in order to assess current social media activity within the financial services sector. The discussion then turned to the main issues facing financial services brands and also future predictions for social media.

The event served to highlight the various themes and concerns facing senior level decision makers in the financial services industry including:

• The rise of niche online communities
• Customer driven markets
• Transparency
• Regulation and risk
• Resourcing

Over the next few weeks we’ll be visiting these topics in detail and will share with you the discussions and insights that occurred on the day.

Image courtesy of shutterstock

As I have a keen interest in social media for financial services I’ve been looking at the Accenture’s paper on “Achieving high performance in insurance through social media”.

It’s a great statement of intent by one of the major international consultancies, and another example that social media is now being embraced by more traditional corporate and business markets.

Accenture’s paper examines the trends in social media and highlights that insurers seeking high performance  should consider using social media within their customer, channel and workforce strategies. The paper also describes an approach for insurers to utilise social media to input into strategies for marketing, sales, services and recruitment.

With regards to inbound marketing, the useful statistic cited is that marketers who incorporate social media into their inbound marketing mix tend to spend 60% less per lead on average compared to traditional marketing methods.

But why should insurers bother to take note of social media? Three main reasons are cited in the paper:

1. Social media helps customers pick through the high volume of information available online because they trust “people like me”, ie, other customers, to give honest, accurate information.
2. Social consumers use social networks as their core navigation and search tool rather than search engines or portals.
3. Social media is being used more and more by businesses as part of their overall strategy.

As the paper points out, “social media increasingly determines who customers trust” and Accenture highlight the  importance of establishing “Listening Posts”, or what we term social media monitoring,  so that insurers are aware of the online conversations that are happening around them. The paper also discusses the best “social media management framework”, or  social media strategy, for success, which consists of process, people, policies, and metrics.

It’s a considered and articulate paper that is probably targeted at large insurance businesses that need external help to establish their social media enterprise framework. It is notably absent of case studies, and while there are some interesting statistics in this well-researched paper, I suspect that key decision-makers in this industry will continue to look for more detailed ROI data to justify their budget spend.

I also feel the paper doesn’t really address the “hub-and-spoke” social media model as a means of being proactive in social media (i.e. a central social ‘hub’ that is part of the insurers website while also engaging with the social ‘spokes’,  like Twitter forums and blogs, where the other relevant influential conversations are taking place) .

What is interesting is that Accenture’s paper is less bullish in addressing the many positive benefits of a proactive social media programme, and that is probably as it should be given that it reflects the risk-averse culture of a cautious industry that is coming to terms with open customer dialog.