Social Media & The Finance / Loan Industry - The Greatest Story Never Told?
(Infographic via MediaBistro AllTwitter & CEO.com)
Just over a year ago, I received a phone call from the Compliance Department. No one ever wants to receive a call from Compliance, and the tone of voice on the other end of the line told me it wasn’t to ask how my weekend was.
“Brian, I need to talk to you about your LinkedIn account.”
“Really?” I asked, feeling relieved. LinkedIn seemed a far more innocuous subject than any other, considering my day-to-day responsibilities. I worked at a boutique investment bank in midtown Manhattan, re-selling distressed, asset-backed bank loans. In English, that means I took people’s bank loans for mortgages, cars, condos, etc., and packaged them into pools of other similar loans and sold them to buyers for anywhere between a few cents to, let’s say, $0.75 on the dollar (still a great deal!), depending on the quality of the “asset” and loan. The loans were “distressed” because since 2008 we had been in the biggest economic tsunami since The Great Depression. The housing bubble had burst, and home foreclosures were occurring across the nation at an alarming rate. We were never busier, and I was already counting my year-end bonus.
So you can imagine my relief when Compliance just wanted to talk about my LinkedIn account. “It seems you have your Twitter account feed on your LinkedIn profile,” she said.
At that point in time, the Securities and Exchange Commission (SEC) hadn’t yet released their ominous-sounding, “Risk Examination Alert – Investment Advisor Use of Social Media”. Neither had the Financial Industry Regulatory Authority Inc. (FINRA) released guidance on the issue of social media. It was generally assumed that we didn’t have to comply with the Investment Advisers Act of 1940, which prohibits advertising. Basically, Broker/Dealers (BDs) had no official guidelines on how to deal with the use of social media.
Summoning my knowledge as a Series 7 & 63 certified Broker/Dealer, I responded, “But I’m not talking about stocks or giving any financial advice whatsoever.”
“Yes, but you could,” she threatened.
Right then I knew: I was working in the wrong industry.
That may sound awfully dramatic, but it speaks to a larger issue regarding the perception large corporations have of social media in general. The global community has the ability to connect and communicate like never before, yet for the most part, social media is vastly underutilized by too many corporations. Forget about individual voices with something to say. I’m talking about big companies doing great impressions of the silence in the wind.
Since then, FINRA regulates what BDs can do with social media, but several of the laws are so out-of-touch that it’s ridiculous. For example, records of all social media correspondence must be maintained. “Liking a Page” on Facebook is allowed and encouraged since it is not considered a type of testimonial, but “Liking a Status Update” is an “endorsement” of another user’s post and is a violation. Yikes. Certainly not encouraging for open and direct communication.
I see this as money literally left on the table. As the infographic above shows, a recent study by Chadwick Martin Bailey says that 50% of consumers are more likely to buy from a company after following their tweets.
In addition to driving sales, investment firms are missing the opportunity to start a serious rebranding of their images. We all witnessed incredible vitriol from Americans in the vastly divergent camps of the Tea Party and organized members of Occupy Wall Street all voicing their anger towards abuses in the financial marketplace. Neil Barofsky attests in his book, Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street, to abject abuses of our trust as to how the $700B in TARP bailout money was used by banks.
Never before has a change in public perception been more necessary, and it may be the biggest marketing challenge of all time. But social media allows people and brands to connect in an unprecedented fashion. Now firms can influence the dialogue and address what people are saying.
Social Media provides data about what customers want, need, and desire. Investment firms and banks can fundamentally change the way they interact with customers and create great consumer experiences. This can drive real change within the organization, and there is real ROI that can be measured when a customer explicitly says what they want.
Major banks also have a tremendous opportunity to elevate the dialogue surrounding their industry. There are wonderful philanthropic efforts within that affect people in meaningful ways. Social media gives banks a voice to tell this story and become more than a faceless institution. Instead, they can actually talk and share ideas with the public to create a great customer experience.
I suggest that there is a huge opportunity to change the dialogue with the American public and social media landscape. I know that as a general rule, the finance community is a slow adopter of technology, but I also know that real changes are being made within these institutions. It’s time to let the public know that investment firms employ people who genuinely care about helping you and your family grow your income.
So feel free to connect with me on Twitter at @B_RockNYC where you will not get stock picks but you will get movie quotes, and a myriad of thoughts ranging from the spiritual to the absurd. Because I have a voice and I have a story to tell. I believe that your company does too. If not, it could be the greatest story never told.