In the past year since the COVID-19 pandemic started, major gaps in the financial industry have been exposed. Most notably, how financial institutions connect, engage, and communicate with customers online via their social media strategy.
Before the pandemic, banks and credit unions leveraged some sort of social media presence. A 2019 study, ‘The State of Social Media in Banking’, revealed that 40% of banks have participated in social media use for the last five years or more, while only 3% responded that they do not use social media at all.
By March of 2020, consumers were forced to socially distance and flocked to social media as they were suddenly struck with job worries, business shutdowns, market turmoil, and threats to public health and safety. Shelter-in-place orders made online platforms the primary channel to find and receive important information, challenging financial organizations to quickly adapt or risk losing market share.
FinTech companies like Venmo, Braintree, and Acorns have raised the standard for financial institutions to make banking, lending, investing, and payments a customer-centric digital experience for end users. Social media must do the same through effective communication, education, and humanization of its brands. The most innovative banks and credit unions are shedding the traditional suit-and-tie persona typical of financial organizations and instead showcasing a modern and relatable brand personality on social media.
As our digital, financial, and personal worlds continue to collide, social media will reign as a critical tool for banks and credit unions to create digital experiences that consumers demand.
Here are a few ways to leverage social media more effectively in 2021.
Leverage focus groups
The largest social media platforms today – Facebook, Instagram, Twitter, Pinterest, and LinkedIn – are a treasure trove of market data. Financial institutions can collect powerful insights into their communities, competitors, and prospects with sophisticated built-in tools and advanced analytics on these social platforms.
By harnessing data analytics and ‘social listening’, financial companies can uncover current customer pain points, analyze overall sentiment and expectations, and gain a deeper understanding of what is missing from their company’s overall messaging.
DEVELOP OPEN DIALOGUE
2020 revealed a critical need for more digital connections and open communication between financial institutions and their customers that will remain in effect for years to come. The opportunities for ongoing dialogue on social media are ubiquitous, yet most financial firms treat social media like an ongoing monologue used to push forward their own agendas and promotional messages.
When the markets tanked and unemployment skyrocketed overnight, many consumers panicked. One report cited more than a quarter of Americans who withdrew funds from a retirement account last year to cover basic necessities did so after losing their jobs due to the pandemic. Even more concerning is how little Americans had in savings at all. FinTech company, SimpleyWise, reported that half of Americans who were furloughed or laid off last year had less than $500 saved for retirement. Social media strategy became a key component of a financial firm’s ability to communicate with current and prospective customers who are actively seeking information about retirement and savings in a crisis.
On Instagram, this might look like providing educational resources in the Highlights section, sharing financial advice on IGTV or Stories, and connecting prospects with financial advisors through the DMs (Direct Message). On Pinterest, that same educational content can live on Pinterest boards with titles like “How to Cover Basic Necessities if You’ve Lost Your Job” or “Retirement Savings Tips during a Recession.” The same content can be repurposed on YouTube where a Community Manager can foster conversations with viewers through the comments section and share helpful resources that show consumers your organization is listening and actively participating.
TURN FOLLOWERS INTO brand advocates
To use social media effectively, your financial services organization must look at ways to attract new customers and turn them into champions of your brand. Just how effective is a social media strategy for lead generation?
A 2018 study found that out of 1,021 financial advisors, social media helped 92% acquire new clients. There are multiple ways this could happen for your organization. First, social media can act like a referral source for many brands. Consumers tend to trust word-of-mouth marketing from someone they know, like friends or family, more than they do ads, websites, and other push marketing tactics. If a bank’s services are talked about and shared positively on social media, they are more likely to attract a new customer.
Second, social media provides the ability to create strong communities that lead to customer acquisition over time. The more engaged your community is on a social platform, the higher your success rate will be to convert followers into customers and fans. As digital marketer Neil Patel puts it: “Social customer acquisition isn’t about being on every platform possible, it’s about choosing the right platform(s) for your demographic and building a strong community.”
Create A DIGITAL INFRASTRUCTURE
At Wells Fargo, social media isn’t just a tactic left to the one intern straight out of college, it’s a fully staffed, intelligent command center. The bank has spent several years building up its social media marketing infrastructure to better understand its core business, customers, and marketing partners. At the heart of this structure is what all big banks and credit unions should strive for – getting to know customers on a deeper level and tailoring the company’s story so that it matches customers’ needs.
With a strong team in place, a financial firm can establish its voice and message on the right social platforms, partner with influencers, execute giveaways and contests, and create video content. Financial organizations that have yet to allocate resources towards a digital marketing team will continue to miss out on valuable opportunities to attract leads and keep clients happy.
Citi, the fourth largest bank in the U.S., can credit its social media strategy for helping the organization bounce back after the 2008 recession. The company tweets several times a day about its products, services, and often shares its “social good” initiatives. It also has a separate customer service account (@AskCiti), which is targeted directly to consumers and gives them a way to connect with the brand.
Consumers will continue to look towards convenient online platforms for reassurance, connection, and direction regarding money, loans, payments, and investing. It’s clear that there’s a strong appetite for digital connections, services, and products from financial organizations. How these companies use social media will have an impact on whether or not customers stick around or flee. It will also determine which organizations bounce back from future crises.