MyPrivateBanking Blog
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Posts Tagged ‘facebook’

Can Banks Participate Fully in Visual Social Media?

Tuesday, November 11th, 2014

(by Francis Groves, Senior Analyst)

Visual Media seems to have grown exponentially in the last few years. Instagram and Pinterest only date back to 2010 and 2011 respectively but as far back as June 2013 Pinterest has had second place - after Facebook -  as a driver of traffic on the Internet.

The power of images is often that they tell a story and, as advertisers have known a long time, pictures undoubtedly have a power to pull people’s attention. And people can process images very rapidly. For social media this has meant that all social media presences are becoming increasingly visual. Just think how rapidly images have crossed into LinkedIn and, especially, Twitter. And Facebook is now one of the Internet’s largest stores of images. Not only have images become ubiquitous in social media, the presences that specialize in images are highly effective. Buying rates (the proportion of buyers to visitors) are significantly higher for Pinterest than Facebook, as is the willingness of Pinterest visitors to affirm they are positively engaged by brands through Pins.

So where does this leave the banking industry with its somewhat abstract products and services?  Visual social media guru, Donna Moritz, lists four especially effective uses that images can be put to in social media: handy tips, how to advice, catchy quotes and checklists and a fifth, infographics, which is also effective but not in Moritz’s top 4. So, the secret of successful images could, it seems, be summed up in a word, ‘Advice’. But of these 5 tactics, banks - and then only a few of them - really only seem to be good at infographics. In the finance industry, if you want advice, you go to a YouTube channel or the blog page on the website because we all know that financial advice is complicated; it takes time to explain it and

So it seems as if banks are not yet quite getting the point of visual social media. No, you can’t say very much at a time through a picture or a graphic but the little you do say could have immense pulling power and visual social media sites like Pinterest could be used to advertise a bank’s services and expertise more directly than is currently the case. In short, banks should use their visual social media as hooks to draw people in to what they have to offer. They seem to ‘get’ this on Facebook and Twitter but not on their visual social media presences.

Congratulations to those banks that are leading the way in visual social media. Maybe now is the time to make these presences more than just pleasant places to visit for a few minutes (Pinterest visits were averaging 16 minutes in 2013) and to make them speak more directly about your service, your expertise and your messages. The good news is that some banks have a lot of original graphical material both already on social media and in their archives and the capacity to create even more. Only 20% of Pinterest content is original (as opposed to shared) so there should be plenty of scope for an institution that can use its visual image ‘capital’ effectively.

(Stay posted for our new report on Social Media in Banking which will be published later this November)

 

Facebook Banking Finally Arrives

Friday, July 20th, 2012

Fortune is reporting that Australia’s Commonwealth Bank and Facebook are quietly building the first Facebook banking app:

“Facebook is quietly planning just such an offering with Australia’s Commonwealth Bank. Currently in an internal beta, with the first version built in March, the application is expected to launch sometime this year to customers. It will allow Facebook users who are bank customers to make payments to third parties as well as Facebook friends through the social media channel, according to the bank. Commonwealth will secure transactions with its own authentication system — similar to how payments are secured on its online and mobile banking site, a spokesperson says.”

It’s an interesting experiment and also quite logical, given the rising interest of financial services companies in the use of social media. In combination with a fundamental shift in cosumer behavior - the younger generations are heavy users of social media plus the older gernerations are also adopting these platforms - it makes a lot of sense to use social networks also for financial transactions. For the banks the critical question is whether they want to use a third party (like Facebook) or whether they will be capable to offer their own social media channels - not onlöy for communication but also for transactions.

 

How to Leverage Facebook for Banking?

Tuesday, May 22nd, 2012

The big Facebook IPO is history. Some people think it has been a disaster. Personally, I believe that it has been a big success for Facebook. May be the stock is overvalued. But the company has now lots of firepower to gear up its marketing engines, try out new business models and generally become a huge factor in online marketing.This means that banks should think long and hard about the role of Facebook (and other social media) in their marketing strategy. It will be an indispensable building block for every marketing and sales strategy of every bank worldwide targeting private cutomers.

Here is a snippet from our latest report on Social Media in Banking 2012:

“Our analysis gave lots of reasons to think that almost universally banks have neither a comprehensive social media strategy nor a dedicated team to serve all media in an integrated manner. Little better than having no social media presence at all, is sending conflicting messages across various channels or showing no activity for weeks. These mistakes can easily be avoided by establishing a dedicated social media team that ensures the message the company wants to send is communicated in an appropriate way across all channels.”

You can get the whole report here. Over the next weeks we will give some more peek previews of our analysis with regard to Social media.

 

Why Financial Services should not underestimate Facebook

Tuesday, May 8th, 2012

In the latest issue of NYMag there is a great portrait on Mark Zuckerberg by the infamous Henry Blodget. The former Internet star analyst, who was one of the evangelist of the DotCom bubble, makes some very good observations about Zuckerberg: he is a great CEO, he is a product genius, he has a very ambitious long-term vision and he doesn’t care about the short-term view of Wall Street. One may add: business people from more traditional industries tend to underestimate the guy who usually appears in a hoody before analysts or other Wall Street type suits.

In the banking industry and in the financial services industry in general, people do also tend to underestimate Zuckerberg and Facebook as a business factor. Our latest report shows, that the most important social network of the world is not very important to financial executives: on average, banks reach only 60% of the total possible points for their Facebook presence in the MyPrivateBanking benchmark.

This is a big mistake…as Paul Ford writes:

“Facebook’s platform has been so overwhelmingly successful that the company hardly had time to do anything but grow. Yet when the growth of the network itself slows, as it too inevitably will, Facebook-as a publicly traded leviathan whose mandate is to increase profits-will need to find new ways of slicing and dicing humanity into groups that will respond to marketing. That’s what lurks on the other side of peak Facebook, and it is going to suck.”

Or, to draw a slightly different conclusion, Facebook will do to the service industries what amazon has done to retail.

 

Social Media and Banking - What is the Best Strategy?

Thursday, March 22nd, 2012

For the last months our analyst team has been working on a new landmark report “Social Media and Banking” - this report will get published in mid April. It will be an in-depth analysis of the social media strategies of the 50 globally most important bank. We are looking  at social media strategies targeted at private customers, retail customers or general users. The banks will be rated and ranked according to a very detailed set of evaluation criteria.

It has become increasingly clear to us that banks approach social media with very different overall strategie - and many have no strategy at all. I think there are right now 3 main social media strategies of banks:

1. Customer support via social media
2. Product and service information via social media
3. Strengthening the brand via charity & community initiatives, sponsoring etc. which is communicated via social media

In many cases, more than one of the strategies are blended together. Rarely, we find an integrated but differentiated offering which brings together all these strategies but doesn’t mix them up or confuses them. In addition, we find typically communication offerings with investors or recruits.

Most banks keep their social media teams separate from their general marketing or communication department. Right now I guess this ist the right strategic step as otherwise the development of social media will develop way too slow. .

We are finding that banks struggle immensely with the issue of how to integrate social media in their regular online strategies and Internet marketing. I am not sure if there is “one best way” to do it. I guess at this stage various experiments are in order to see which approach works best. But this means a good bank will do lots of different things on their website to try out the new media.

So, stay put for our new report - there is lots more to come.  By the way, here is our  older report on Wealth Management and Social Media.

 

Should banks be present on Google+?

Friday, January 20th, 2012

Google+ was launched 7 months ago in June 2011. On January 19 it was reported that G+ has surpassed a user base of 90 million and may reach 400 million by the end of 2012. However, these are not necessarily active users (as the 900 million reported users of FB). MPB analysts are working right now on a new analysis of social media & banking (to be published end of March 2012). The preliminary results on Google+ show that most banks have a presence there - but usually without any or with very little content. It can be described as “wait-and-see-strategy” or simply to put a placeholder on the network.

Over the last 2 months G+ has gained a lot of traction and there seems also some clear support from Google’s search services for the network. I guess that G+ as a networking platform is still technically a bit confusing (may be a consequence of the different terminology like “circles”, “hangout” etc.) but is essentially offering a similar platform as Facebook. Some innovations like “hangouts” and the search function seem even better than on FB. Yet - despite some heated discussion among tech geeks - this is not really important. What seems crucial is the point that Google potentially has the market power and leverage to push G+ to become a FB rival. The key here is the search services of Google and some existing services which - in combination with a new viable network platform - can potentially become very successful. Yes, Google Buzz was a disappointment - but probably a necessary stepping stone to the technically much more mature G+.

What does this mean for banks and other financial service providers? They should probably have a presence on G+ and also spend some resources on filling this presence with content & life. Not necessarily too much yet - as it remains to be seen what will happen to G+ over the next 12 months but don’t underestimate the marketing power of a 800 pound gorilla. If G+ can keep its speed one will have to take it seriously very soon. It will be fascinating to watch how and where G+ and FB will try to get a competitive advantage and how the will try to differentiate themselves from each other. Make sure to follow our research when our new report will come out in March with more analysis about Google+, other social media trends and how banks can profit.

 

Should Private Investors Go for Internet IPOs?

Thursday, June 30th, 2011

Over the last 6 months or so a new vintage of Internet IPOs has generated a lot of publicity. Chinese Internet companies and social media companies are going public in droves.  LinkedIn probably being the most significant among them. In most cases the valuation of these new ventures is quite lofty and reminds of the dot-com buble that ended with a crash in 2000. Yesterday a social gaming company called Zynga has made some moves to file for an IPO soon. Social network Facebook and the e-commerce  v enture Groupon are also expected to go public soon.

Clients of private banks are often offered IPO shares or investments in so called pre-IPO vehicles. Goldman Sachs has done just this for some of his clients with Facebook shares. Some private banks can do this as they have close relationships to their investment banking divisions or venture investment organizations.This is especially the case for large, integrated players like UBS, Credit Suisse, Deutsche Bank, Goldman and others.Often these special offers are used for client retention and are used as special “goodies”.

But is it a good idea for private investors to invest in such risky new companies during or even before an IPO? MyPrivateBanking research has undertaken a thorough analysis of the most catastrophic IPOs during the dot-com buble and compares them with today’s new vintage of Internet IPOs. The result is quite shocking - it shows that almost exactly the same banks and IPO underwriters who caused the stock market crash 10 years ago are now doing the same thing all over again. The report will be online soon and will be available for download on our main website.

 

Find the Bubble

Monday, June 13th, 2011

People are wondering whether the social media hype we are witnessing is a new bubble in the making. Facebook, LinkedIn, Twitter, Groupon, Skype - you name it. Valuations seem like pie in the sky again and i-bankers are cashing in handsomely. But are there some truely objective measures to spot the bubble?  Here is a 10-point-checklist to find out about the bubble-grade of the latest stock market fad…whatever it may be.

 

Why You Can Fool Some Investors All the Time

Wednesday, January 12th, 2011

By now we have heard all about the Facebook story and Goldman Sachs. The bank’s announcement that it is offering its private clients a chance to invest in Facebook has touched off a battle for the shares among its rich clients. The other day we had in our weekly private banking link collection a great link to Rich Bookstaber’s blog where Rich predicts that over the long-term Facebook will be marginalized for a variety of reasons most importantly because it reduces people’s personalities and disregards basic privacy rights.Whatever you may think about the future of social networks in general and Facebook in particular it seems pretty clear that right now there is a major financial hype especially about Facebook but also about a few other social media and networks which aspire to go public or at least make a buck for founders and VCs through a juicy trade sale.

Remember Yahoo, AOL or even Lycos or Altavista? Each one was a Titan of the Internet back in 1990s. Fast forward to today and Google or Facebook have taken the throne. But technologies and user behavior is changing ever faster and Internet investors should be careful with companies that are valued at $50bn, have revenues of a little more than $1bn and a net profit of around $400m. But investors are not careful. Goldman’s wealthy clients want in on the Facebook deal. At the end of the day, it’s not the investment bank who is paying if and  when the valuation will not hold up. By then the bank will long have cashed in the fees for selling private shares to investors, the IPO fees and many other charges ponied up by investors to become part of the action.

Abraham Lincoln said that you can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time. Let’s just hope that more investors will make their homework and become part of the latter group.

 

Are Private Banking Clients Active Users of Social Networks?

Tuesday, November 9th, 2010

As we have just released our new report on Wealth Management and Social Media we would like to give another peak preview on its content. One of the objections we hear a lot  from private bankers against social media is that typical private banking clients are too old, too conservative and too busy to spend their time on Facebook & co. Well, we beg to differ. This is only a small piece from the report, summarizing our market research:

An important trend for wealth managers to appreciate is that affluent or wealthy individuals use the general platforms like Facebook or LinkedIn most frequently, visiting niche platforms only occasionally. In conclusion, our findings show that wealthy individuals who are active on the Internet typically use two or more platforms in parallel:

Broad-based social networks like Facebook are used to communicate with friends, relatives or neighbors but also to exchange opinions with strangers about a diverse range of topics.

Professional networks like LinkedIn or Xing, are visited in order to find and re-connect to former co-workers, to expand one’s professional network and to identify potential new business partners.

Micro-blogging-networks like Twitter help users to stay informed and to read the comments of specific people on recent news topics in real-time - but also to comment themselves extensively on all matters of personal or professional interest.

Niche-networks are used to communicate with other people who have the same, very specific interests (such as certain hobbies or sharing the same challenges or life situations.

 
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