Financial Services Flunk Social Media

By Marc Dresner, IIR

 If Jeffrey Hayzlett were to grade the financial and payment services industries on social media savvy, they wouldn’t receive a passing mark.



The author, international business and marketing authority and former Kodak CMO whose Prepaid Expo 2012 presentation generated considerable buzz, says that financial and payment services—more so than other industries—appear to be willfully ignorant of the changes taking place around them and the potential impact social media will have on how business is done in the near future.



Jeffrey Hayzlett

“A huge portion of the next generation of customers will have never stepped foot inside a bank, a post office or even in stores in certain retail categories,” said Hayzlett.

“They’re going to establish relationships online with entities with which they will never interact in a terrestrial environment. It’s already happening. Look at Amazon, eBay, iTunes…,” he said.



These changes bear profound implications for how companies engage customers, and Hayzlett says they present an attractive but largely unexploited opportunity for financial and payment services providers to build relationships and create highly personalized, meaningful experiences that are very much aligned with business objectives.

“Trust is at the core of this industry,” said Hayzlett. “We trust financial services providers to protect and nurture the things that matter most: our savings, investments, businesses, homes, retirements, etc.

“Finance is incredibly personal and so is social media,” he added. “Through social media, financial and payment services providers can insinuate themselves in people’s daily lives in unprecedented ways.”



Hayzlett’s Take: Social (Media) Life

LinkedIn: “A business card or sign on Main St. displaying who you are and what you do.”

Twitter: “A megaphone with which to shout from your front porch at passersby who stop a minute and then move on.”

Facebook: “Your living room. A brand can bring two million fans into its living room and the engagement is genuine.”

Pinterest: “It’s the digital equivalent of that wall in your teenager’s bedroom with all of the posters, magazine clippings and pictures tacked to it.”

“Social media is about hearts and minds, not ears and eyeballs,” Hayzlett said. “We’re talking about accessing a highly engaged community in a very relevant way.”

From Hayzlett’s perspective, that the financial services industry is not a pioneering force in social media is completely irrational and may ultimately have a deleterious effect on business.

“Your customers have always talked about you,” he added. “The Internet has simply provided scale, so now they have a megaphone.  Whether you choose to participate or not, those conversations are happening.”

Hayzlett notes a slew of emerging, more nimble players like Square are moving aggressively into the space traditionally dominated by massive, monolithic companies. “For the big guys, it’s quickly boiling down to a game of buy or beat. Either way, they need to embrace social media, not fight it.



“Most financial services providers would prefer that the world never change,” he said. “These companies need to start playing in the world in which we actually live—not the world in which they would like us to live—or they risk irrelevance,” he said.



ABOUT THE AUTHOR

Marc Dresner is IIR USA's senior editor and special communication projects lead. He is the former executive editor of Research Business Report, a confidential newsletter for the marketing research and consumer insights industry. He may be reached at mdresner@iirusa.com. Follow him @mdrezz.



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