This week I was kindly invited to appear on Bloomberg TV to talk about a subject which hoves into my line of vision on a fairly regular basis recently, the use of social media in the financial sector, and in particular by CEOs.
Unfortunately there was some rather large, Bob Diamond-shaped news breaking at the same time, so I didn’t have the chance to explore the subject in as much depth as I’d have liked.
Time for a blog post...
Now firstly, this isn’t going to be one of those ‘how to get your boss on Twitter’ posts, there’s already plenty of them around (I have a vague memory of covering it myself a while back).
Here I’d like to look at how Twitter, and social in general should be utilised by the financial sector (why let that research go to waste after all?), and how CEO and board-level execs may want to connect with their customers.
First off, the failure to connect certainly isn’t limited to the financial behemoths of the world. Many complex or ‘upscale’ services have struggled to make social work for them in the way that they feel it should.
Naming no names, a number of luxury goods and fashion brands have previously found their attempts receiving negative feedback, and this is indicative of a general disconnect between often insular brands and their customer base. These companies have tended to place Twitter firmly under the auspices of marketing, and used it as a push advertising medium.
Now, I realise this is a huge generalisation and I have seen some very good examples, (first direct is one) but it does seem strange that the financial sector should be behind the curve when it comes to social.
While there will always be the challenge of complex FSA regulations to surmount, and restrictions on what can and cannot be said, building long-term one-to-one relationships is surely at the very heart of the financial management business. Whatever the level of investment, you have to be able to put trust in your financial advisor.
When it comes to senior management, having an active account may not be worth their while (they are after all, quite busy running the entire planet’s finances). There’s certainly a risk involved when any public figure takes to a social network, and if there’s one thing these people are good at, it’s risk management.
Is the return worth the effort?
To answer this, it’s illuminating to look at the kinds of senior executives who are on Twitter, as they tend to fall into two broad camps:
Firstly we have people like Eric Schmidt, or Zappos’ Tony Hsieh. Both are companies that look closely at customer feedback and prevailing sentiment to guide agile product development and customer service.
It’s also worth mentioning Steve Jobs at this point.
Apple has never been active on Twitter (at least until very recently, with the creation of a few iTunes and apps-focused accounts), but that’s mainly because it didn’t need to be.
Its product development has always been highly responsive, and it can be considered a social company by dint of making things that people really want to share with others. They may not have responded, but you at least got the feeling that Apple was listening to you.
These companies rely on social buzz for a lot of their business, and work constantly towards justifying the hype. There’s clear and measurable value for them, although it may not be monetarily measurable, something that Financial companies will obviously struggle to understand.
These people realise the PR juice that Twitter offers, and their businesses are in many cases directly affected by having a popular public persona. In some cases the attention they receive isn’t always positive, but it does help accomplish something important - it humanises them.
It brings a real insight into the person, the brand, and the decisions that the company makes at a very high level.
Building trust through insight
Trust in the financial sector is currently at an absolute low, possibly the lowest it’s ever been, and it looks set to continue to decline.
Even looking at someone like Bob Diamond, he would obviously be opening himself up to a huge amount of criticism through the channel if he were to maintain an active account, but I seriously doubt it would be more than that which already exists, and a selective response may at least help the rest of us understand why certain decisions were made and certain actions taken.
Again, there’s room for humanisation, for the removal of the blank corporate veil. It's certainly not a cure all, but at worst it couldn't hurt. Although the finance sector cannot by its very nature be completely transparent, social media offers an excellent way for it to begin rebuilding trust.
Recently both Goldman Sachs and Morgan Stanley have taken to Twitter, but it seems to me that they are missing a huge opportunity. Morgan Stanley are particularly interesting, having allowed (Or at least, officially allowed) around 17,000 Financial Advisors to begin Tweeting.
At first this sounds great; we’ll get some real insight into the company, into its internal culture, into the minds of the people who manage our money… won’t we?
Of course not.
Terrified that someone will tweet something off-brand, Morgan Stanley has dropped the ball entirely, relying on uniform account pages and sets of pre-written tweets, usually covering bland corporate initiatives.
Now, there’s nothing wrong with news on Twitter, but if I want news about Morgan Stanley, there’s a @MorganStanley account I can follow.
I don’t want its news links mass-spammed across the network by 17,000 people every day.
MSSB’s head of social Lauren Wagner Boyman recently tweeted this:
I’m not sure what ‘engagement’ covers in this case (I’m assuming that term encompasses total network engagement – ReTweets, @Replies etc, but not additonal goals like traffic or conversion), but I’d assume that this is because we’re in the early days of their presence on Twitter.
Once people begin to realise that this is all formulaic stuff then that engagement will die off.
A little personalisation (It’s worth saying here that Boyman’s own account is a little better than most at this, probably because she’s writing her own tweets) would be far more effective at engendering genuine trust.
More importantly for MSSB, it’s missing out on an incredible chance to position itself and its employees as experts in the sector.
The company is full to the brim with incredibly talented analysts, they have huge piles of data and the technology to visualise it in astonishing ways. That’s exactly the sort of content that people love to see and love to share, it’s inherently ‘Like’-able. They do currently direct users to resources, but they're bland. A company like MSSB should be at the forefront of data-viz technology, and should be using that to wow us all with their expertise and insight.
In addition, a bit of freedom would show that the company hires bright people and trusts them.
If Morgan Stanley doesn’t trust its own staff not to tweet exact revenue projections half-way through a takeover bid, then why should anyone else trust them either?
Given the nature of the tweets (all pre-written, all sent through Social Buzz), do we even know if it is the staff that are tweeting? I could easily set up thousands of bots that accomplished the same job.
Engagement on Twitter often takes off when you begin following experts, people with useful niche knowledge, and this is where these companies could really excel, building confidence, trust and respect.
Morgan Stanley will see an initial media bump from their efforts, but there’s no long-term value to be had from this, in fact it’s quite the opposite, with rivers of corporate rubber-stamped bilge washing around Twitter.
As mentioned, it may not be up to senior management to be doing the actual Tweeting. I don’t really care what James Gorman had for lunch, but I do care that he takes an interest in a large, active, media-savvy audience and responds accordingly at a strategic level.
The heads of financial institutions may not want to open their lives to public view, but to ignore or dismiss the medium smacks of hubris, and I’d rather see companies like this just admit that they aren’t social, rather than attempting to engage in the wrong way.