Banking on Social Media: The Financial Services Brands That Get Social

The vast majority of wealth managers and private banks are dealing quite “clumsily” with social media according to a recent study of 50 leading private banks and wealth management firms by Swiss consulting firm assetinum.com.

“Amateurish” social media strategies, “hibernation” on Facebook and “tokenism attitudes” towards Twitter and YouTube are abundant.

Of the institutions assessed on a 100-point scale, the average score was 43 points. Twenty-seven of the firms did not reach half the maximum points in the Facebook category; 25 fell short in the website and mobile category; 25 scored less than half in the Twitter assessment, and for YouTube and LinkedIn the scores were 29 and 21.

While 42 out of 50 banks have Twitter accounts, just 26 are active in response to posts and only 13 posted content about wealth management. Nineteen banks have blogs with only six of those interacting proactively with consumers.

“For a surprisingly high amount of banks a convincing social media strategy is still not distinguishable,” said Benjamin Manz, managing partner of Assetinum in a blog post by Nick Kalikajaros.

A correlative study by Scorpio Partnership, sponsored by Standard Chartered Private Bank and SEI Global Wealth Service, found that 40% plus of those with high net-worth younger than 50 consider social media a key channel for communicating with their banks.

“One thing that has become clear since we began to use social media: Customers now take it for granted that they can communicate with their bank through social channels,” said Marged Lloyd, head of online communications at Standard Chartered's London HQ to the New York Times. “High-net-worth-individuals are often characterized by their international mobility. Social media, by its very nature, is largely unrestricted by national boundaries.”

Those institutions doing well include Citibank in the lead (with 84 points) followed by: Société Générale (83 points), ABN AMRO (82), Barclays (80), Wells Fargo (76), Standard Chartered (73), Deutsche Bank (70), Vanguard (70), Commonwealth Bank (69), Nordea (68) and Royal Bank of Canada (68).

For example, Citibank has developed a social media product for their high-net worth clients to make restaurant recommendations, while Standard Chartered is reaching out to foodies on Facebook by setting up “Food Explorer” pages for India and the UAE, and blogs about its sponsorship of the Liverpool soccer club.

While private banks are concerned about the perils of regulatory issues, “reputational risks” and the resource commitment to social media, “too much time and effort for a ‘playground’ allegedly not to be taken seriously,” Manz told the Times, “Reputational risks can best be avoided if banks are prominently present on social media channels and can react to accusations.”

Kalikajaros adds, "Advocates of social media believe that its use goes right to the heart of brand values and that firms need to show that they are where their client base is – networking online. In the words of Pat Allen, a veteran marketing manager and chief executive of Rock the Boat Marketing, a Chicago-based financial services marketing consulting firm, social networking 'shows that you’re available, you’re accessible and that you’re paying attention.'"