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Archive for the ‘social media’ Category

Social Media in Finance – Is It Time for Your Compliance Health Check?

Friday, April 4th, 2014

By Francis Groves, Senior Analyst

How far have compliance requirements for social media in finance come and exactly which are the most likely problems and the prime concerns of the regulators?

2013 saw significant strides being made towards making social media compliant in the banking and finance industry. This trend was particularly marked in the United States with the SEC signalling last spring that social media was an acceptable medium for disseminating the kind of information that could move stock prices just so long as the company’s investors were made aware that Facebook, Twitter & co. were going to be used as channels for this purpose by that company. In June the US’s Financial Industry Regulatory Authority (FINRA) announced that it would be carrying out spot checks on institutions regarding compliance in the social media arena. In a separate development, in September FINRA fined a broker for Facebook remarks about a company in which he and a few dozen of his clients held investments but which he failed to disclose in the Facebook entry. Finally, in December the Federal Financial Institutions Examination Council (FFIEC), which performs a policing role in relation to corporate practices of US banks and other financial institutions, produced its own final guidance on social media practice.

Just this week, the SEC issued guidance on the use of social media by financial advisors that makes clear that they are prohibited from using social media channels to advertise or promote themselves by means of client testimonials. Although customer testimonials may seem a fairly harmless form of self-promotion, under US law, as far as financial firms are concerned, testimonials are considered too selective and unrepresentative.

So, as far as the US is concerned the regulatory framework is fairly clear and, not surprisingly, expertise and resources to help the finance industry with social media compliance have become widely available. Social media compliance practitioners in the US include i-Social Smart, Actiance, Nexgate, GremLN, Gladiator Social Media Compliance Services, Smarsh and SocialComply from Temenos, the Swiss banking systems provider. Meanwhile, in Europe the regulatory picture is less clear with legislators and regulators still looking into the issues and considering their issues. Fewer social media compliance services seem to be available although some, such as Actiance and SocialComply, which are active in North America, also operate in Europe.

So what are the key demands that regulators have or may have in relation to social media channels in finance and what effect is this likely to have?

The following seem to be the main areas of concern in relation to social media in banking and finance:
- The risk of fraud / the danger to financial brands
- The danger of failing to take responsibility for social media content because the channel is deemed to be an   external third party
- Failure to train staff properly on handling social media as company representatives
- The danger of social media using customers privacy being breached (by themselves or staff)
- The problem of institutions responding to social media communications too slowly
- The danger of security breaches

Clearly these dangers are not negligible but neither should they create enormous problems for banking and finance staff who themselves are rapidly becoming more familiar with social media in ordinary life.

At MyPrivateBanking, we have consistently identified low cost advantages as being one of the attractions of social media. Effective use of social media gives financial institutions opportunities to both identify their own customers’ needs and preferences and to keep track of competitor activity in key areas. More generally and longer term, we see the banking and finance industry’s engagement with social media as empowering for customers and as an important factor in the achievement of better financial services than ever before. It would be a pity if regulation inhibits the growth of social media in finance and, to be fair, we believe that this is unlikely to happen. Many institutions will need outside help with achieving compliance in this field but the real danger may be that financial regulation of social media becomes unduly restrictive or, even worse, an excuse to stop necessary changes to the industry.


What wealth managers can learn from BrewDog

Friday, January 10th, 2014

By Francis Groves, Senior Analyst

One of the success stories of 2013 was BrewDog, Scotland’s largest independent brewery, who managed to raise £4.25 million through its crowdfunding scheme ‘Equity for Punks’, ably supported by its own dedicated Twitter stream, #equityforpunks. It’s a heart -warming story and not just because of the beer! A business dedicated to craftmanship in a small community in a picturesque and remote part of the British Isles makes good with the support of loyal supporters around the world.

However, it does highlight some problems for less colorful players in the financial world. BrewDog’s success in financial AND media terms doesn’t offer helpful lessons for wealth managers just because it’s all to do with popularity. And popularity can be ‘here today and gone tomorrow.’ Not that wealth managers have to be unpopular but, in social media terms, they should aim for stimulating and interesting. Wealth managers need to be involved with social media for the long-haul in a way that matches their business. Because, in all sorts of ways - be it investment as deferred enjoyment, contrarian investing or a wealth management approach that has been refined over decades - wealth management is a longer term business.

And to make a long-term business interesting, it needs to show its customers (through social media) that its changing, developing and growing in a way that reflects its own DNA. To put it another way, wealth managers and private banks should be using social media to allow their clients and potential clients to really get to know them. As MyPrivateBanking have often said this requires authenticity on the part of the wealth manager but clients won’t get to know wealth managers through just a Twitter stream or even their Facebook Timeline. These should be used as pointers to the wealth managers expert blog, video commentary or website corporate social responsibility items.


Top 10 Tech-Trends in Mobile & Digital Banking 2014

Monday, December 23rd, 2013

Trying to stay ahead of the curve when it comes to technological development is a challenging task. In 2013 rapid movement has affected the finance industry landscape: mobile banking has established itself as a regular touch-point for customers, mobile payments have exploded and banks are wrestling big data more than ever. We have surveyed our analyst team to note down in short the most important technology trends for the banking industry in the post-PC era for 2014:

10) One interface for all channels
As digital touch points evolve, users’ tendencies to contact financial services online will grow alongside. Using a variety of different devices is one consequence. Financial providers, therefore, will have to create a uniform experience across all channels, with the same level of real-time responsiveness and personal service.

9) Financial Education goes gaming
For reaching the generation that grew up with computer games, banks will have to come up with innovative approaches. One possibility is to put the fun in finance: offering a variety of games that playfully educate not only children, but also adults.

8 ) Slimming the wallet
In the future banking technologies will mainly focus on reducing complexity and enhancing user experience. One of these gadgets will literally show how to slim your wallet: One example is the technology from start-up “Coin” based in San Francisco: the electronic card that stores multiple cards on one Bluetooth device, can merge all your credit and debit cards with the support of an adapter and a mobile app.

7) “What’s App” inspires communication channels within apps
Chat functions modeled after the popular “What’s App” will enter banking apps. Connecting with your advisor will be easier, more personal and convenient than ever. Provided banking app developers hear the call.

6) Voice command on the rise
Some banks have already come up with features that allow, for example, voice recognition for log-ins or entering simple commands. Banking apps will take this one step further and remove the need to use buttons, dials and switches completely.

5) Windows Mobile gaining market share
Of all of the leading operating systems, Windows Mobile obtained the largest year-on-year growth worldwide. A result primarily driven by the support of Nokia. Nevertheless, Windows Mobile is likely to become the 3rd most important platform next year to distribute financial apps.

4) Demand for digital advisors
Digital advisor tools will become an important part of the digital channels of bank. These include budgeting or financial planning tools, and also complex instruments for risk assessment and investment decision making are up and coming. Besides improving user experience through interactive features and personalization options, these tools create a unique overview and understanding of the user’s personal finances. Supporting customers to strengthen their own financial know-how might replace the personal advisor in some cases, but will open up valuable insights into customer behavior and increase loyalty in the long run.

3) Wearable banking
As the first banking apps for Google Glass roll out, potential customers are already excited. Wearable gadgets that allow various services through voice command or simple touch are coming to life. Although still in their infancy, these technologies will progress and soon your watch will call out when your credit card account is maxing out.

2) Digital Currencies gain Legitimacy
Although there remain serious doubts about virtual money, currencies like Bitcoin, Litecoin and co. will gain popularity and legitimacy, and not just within the virtual economy. The arena is moving from online gaming platforms to real-life goods and will gain widespread use with online retailers and potentially even with banks. Will your digital channel enable Bitcoin payments soon?

1) Big Data: generating value from app-user information
The financial technology landscape is evolving, and so is competition, complexity and the amount of data processed and generated every day. Particularly, information derived from mobile users has a high potential and will generate new insights. Banks will thereby be able to create completely new products and differentiate themselves on the market.

We wish all our clients and readers relaxing holidays and a happy, successful New Year!


Personalization – success factor in bank’s social media strategy

Friday, December 6th, 2013

The world was amazed when Richard Branson, CEO and founder of countless consumer ventures, started to tweet three years ago about his company, events and his personal life. Branson was one of the first CEOs who broke with the common practice that high ranking representatives of companies should stay out of social media. The legendary entrepreneur started tweeting and many were to follow.

Large banking groups and multinational wealth managers feel the challenge to give their firm a human face in age of digital ubiquity. Personal contact with clients, to build or launch relationships, is invaluable especially for wealth managers. With more people spending more time at their desktops, notebooks and mobile devices in the big 5 social networks offline personal contact becomes a scarce good. However, social media offer new opportunities to get close and personal to client. But corporate social media presences and company profiles on social media are not sufficient to foster a real personal relationship on a social network. Only individuals can offer that human touch: Why not follow my personal financial advisor via her Facebook updates? Why not talk to my wealth manager´s CEO via Twitter? Why not ask my bank’s head of the investment committee about the latest economic insights on LinkedIN?

Personalized social media refer to social media channels on either the local/regional level such as country, state or branch level and personal social media presences linked to one person such as a CEO, CIO, or a regular personal financial advisor. These presences bridge the gap between wealth manager and client.

The global wealth manager UBS allows clients to take a closer look at CEO Jürg Zeltner via his personalized blog on the website. Users get information about his career and development within the bank, can listen to his podcasts and read his regular updates.

Alan Higgins, UK CIO of the English wealth manager Coutts, is remarkably active on his Twitter channel. Besides financial market updates he also tweets about cultural events or “best movie of…” list. Moreover, Higgins pays attention to his users by responding quickly and casually to comments to his tweets. A lively Twitter account with high value for customers and a real personal touch are the results.

An outstanding example for local level presences is also German Commerzbank which serves its customers with channels on Facebook for its Hamburg and Munich branches. Customers can get information about opening times, the local team and contact options. The social media team invites users to local events to get to know the bank bridging the online-offline customer experience.

One can imagine many more ways to use social media as a tool to personalize the client experience. It’s up to the financial institutions to leverage this opportunity despite regulatory and other hurdles that might limit the specific content a bank can publish over social media channels.

Our new report on Social Media for Wealth Management 2013: The Train is Leaving


GooglePlus: the stepchild of private banks’ social media

Monday, December 2nd, 2013

In our recently published report on social media for wealth management, our analysts included Google+ in their evaluation of wealth managers’ activities on the ‘big 5′ of social media platforms. Launched in June 2011, Google+ not only caught up with Facebook, Twitter, LinkedIn and YouTube but even reached the second place in user activity after overtaking Twitter, by the mid of 2013. With 34% of all Internet users being present on Google+, only Facebook with 46% is still capable of defending its first position.

Given these developments the findings of our analysts are somewhat striking since the overall performance of the 30 evaluated private banks on Google+ is in clear contrast to its increasing importance. On average only 22% offer a Google+ presence. While the consensus still seems to be that being present on the other social media platforms is important, Google+ will gain influence rapidly. Why?

- Because the trend clearly depicts it: after 88 days Google+ had 50 million users. Facebook reached that after 3 years.

- Because it belongs to Google: presences on Google+ definitely have an advantage on Google Search results.

- Because it’s different: information is posted in real-time, without being limited to either space or channel. It gives a more professional impression than Facebook and has more interactive features than LinkedIn.

- Because of selectivity: information can be spread to the right persons through segmenting posts by ‘circles’ (note: Facebook has introduced a similar feature).

- Because of YouTube: Google’s other big social network YouTube, the most important social video platform, is strongly linked to Google+ - moreover, a Google+ account now even is required to sign in for YouTube.

- Because of smart features: Hangouts can be used not only for private chats but also for webinars, directly being posted on YouTube, or conference calls with up to 10 participants.

What is the take away for wealth managers’ social media strategy? Google+ must not be underrated. As the stepchild of social media is growing up, it should be taken seriously - underestimating its influence might carry the danger of lagging behind in the competition for the eyeballs of your clients and prospective clients.


How banks can become part of their clients’ personal brand

Monday, November 25th, 2013

Evan Spiegel, the founder of Snapchat has been in Europe since turning down the $3 bn offer from Facebook. He has repeated some of his interesting insight and analysis of the social media scene. These include his observation that, unlike Snapchat - which is genuinely recreational in character - Facebook, Twitter and others are all to do with personal branding.

Whether or not you consider personal branding to be cool - Evan Spiegel seems not to - we wonder what kind of private banking would align itself well with possible personal brands. The possibilities for personal branding must be almost endless and no bank could expect to match more than a fraction of them. Nevertheless, there must be some basic pointers that private banks would be well advised to pay attention to.

First off, very, very low rates of interest on clients’ cash deposits is a contemporary fact of life that doesn’t sit well with anyone’s personal brand; it probably makes the customer feel like a sucker. So bankers have plenty of ground to recover in other ways to make clients to want to include them in their personal brand.

The strategies that could help here are an energetic approach in areas like corporate social responsibility and sponsorship. Another area where there is scope for banks to make themselves more appealing is through gaining a reputation for their business banking services to inspiring entrepreneurs or interesting brands.

A bank that is actively (and helpfully) contributing to the market for ideas about investment, economics and business in general will also find that it can become part of clients’ personal brands more easily. If the bank has staff with a recognized media presence on old media and/or new, the likelihood of gaining a place in a customer’s personal social media brand is all the greater.

All these are factors that can make a difference to a bank’s reputation not only among those who cultivate a personal brand but also banks’ less self-aware clientele. However, no private bank has a chance of building the kind of profile that clients like to associate themselves with on social media unless it engages with social media itself.

Our new report on “Social Media for Wealth Management” will be published next week.

(This post is authored by our senior analyst Francis Groves)


Banks and social sharing

Friday, June 7th, 2013

In Mary Meeker’s now famous yearly “State of the Internet” presentation a chart (page 28) shows how strongly Internet users in different countries share their life via social media. Surprisingly, it is the population of Saudi Arabia who lead the ranking (60% “share most or everything online”), followed by India, Indonesia, South Korea and Turkey. The US are - surprisingly - way down the list with only 15% and Germany almost last with under 10%.

Apart from the interesting question why emerging markets are so much more into social sharing compared to Europe and the US, the main point is that social sharing is BIG. It’s important. It’s probably the most important trend from a marketing perspective in the next ten years. So, we are wondering why this trend is largely ignored by banks around the globe. In our latest research on Mobile Apps for Banking and Wealth Management Websites we found that only a minority of banks of about 40% allows (some) sharing of their content via social networks mostly in a very basic version.

Social sharing comes in many different flavors. It’s simple to put a Facebook or Twitter icon below or above every article. But that’s not very likely to generate the kind of user excitement one would like to see in social networks. A bank should think pro-actively about its “sharing strategy” which contains a number of important steps:

1. Ask the right questions: What should be shared? Who should be encouraged to share? Which sharing channels are most effective - given the segment one wants to reach? Plus a few more questions of which the sharing strategists should think about.

2. Generate sharable content: Once the strategy is clear, sharable content needs to be put in the right place. It could be a host of new, engaging client tools on the website - for instance to encourage the clients to think about their financial future in completely new ways. It could be a new mobile game inside our outside the standard banking app. It could be an outrageous video campaign, targeted at a much focused client segment like wine collectors, going viral.

3. Opt for a/multiple sharing channel(s) that fit(s) the target segment: YouTube, LinkedIn, Facebook, Pinterest and/or a host of other platforms. It all depends on the user segment.

4. Test: But beware, there is always the risk that instead of benign recommendations and sharing on social networks you may get a veritable shit storm ridiculing a marketing campaign gone very wrong. To avoid this, some testing and tweaking with real users before you go live is essential.

5. Follow: Make sure you are not missing a success or a shit storm (well, you ain’t gonna miss a real shit storm). So, track your campaigns closely, track the shares/likes/pins, track the comments you get…whatever.

By the way, social sharing is closely related to another concept which will have a major impact in the coming years: “On-demand marketing”. We will talk about this in one of the upcoming blogs…


Clever Blogging by Blackrock

Saturday, May 25th, 2013

by Francis Groves, Senior Analyst Social & Mobile Media

Earlier this week, Ignites, the Financial Times publication that follows the US mutual funds industry, has highlighted some of the strengths of social media strategy of Blackrock, the hugely important fund manager that also owns the iShares ETF business. Blackrock is reported to have seen the biggest rises in the numbers of people following it on Twitter and YouTube, 15.9% and 38.4% in the month to May 11 of any of the US’s top 10 fund companies (Ignites reports). But what really drew our attention was the group’s blogging strategy. Blackrock and iShares staff are sharing the same blog - under the iShares brand - and Blackrock is adopting its subsidiary’s ‘blog-centric’ social media strategy which basically amounts to focusing on great content in the expectation that readers will it pass it on. MyPrivateBanking commend this commitment to blogging as the thinking person’s social media. Although many commentators are apparently critical of the idea of a single blog for the entire group, we wonder if doing away with dual or multiple content series actually makes content a whole lot more accessible for social media consumers. It’ll be interesting to see if Blackrock/iShares stay with their single blog approach.


‘Knab that Advisor’: Knab Bank’s New Take on Financial Advice for Retail Customers

Wednesday, December 12th, 2012

Knab, the new Internet bank, that’s a wholely-owned subsidiary of the Dutch insurance giant Aegon, has an interesting approach to the provision of financial advice. The name, ‘bank’ back-to-front, has been chosen to suggest not just innovation but re-engineering of retail banking, and when it comes to providing financial advice they certainly seem to be living up to their revolutionary principles. Firstly, they won’t actually be offering any advice of their own, just offering customers the opportunity to choose from a panel of pre-selected financial advisors. However, the final touch is the most interesting idea; customer reviews of these financial experts that are publicly available. Advisors have to receive good reviews in order qualify to continue to be available for hire through Knab. With this combination of the bank vetting the advisors first and the customers’ satisfaction scores, the Knab team may have succeeded in creating one of the safest environments for retail customers in the industry. This experiment deserves to be watched closely.


ISSUU: How Great is its Potential as Social Media for Business?

Thursday, December 6th, 2012

At first glance, ISSUU seems to be filling a significant gap in the range of social media: providing a way for banks and other businesses to engage with the public through print publications in the same way that YouTube provides a vital outlet for corporate video content. The site passes the first test, of providing a lot of attractive content. If you want a beauty parade for publishers and graphic designers, ISSUU is a good place to go. However, the site has yet to be included among the fairly select group of Internet presences that have become meeting places on a mass scale. To achieve that status, ISSUU needs to recognize that readers (and that’s who most site visitors will be) are more concerned with finding individual articles of interest than admiring a magazine cover to cover. They need more help from the site, probably in the form of (blog-style) tags for articles. The finance industry has to accept that their material will be jostling for readers’ attention alongside competitor offerings. If ISSUU insists on always preserving the integrity of individual publications in presenting content, it won’t become the channel of choice for finance industry players to grow their readership.