Lithium game-changing-social-strategies-for-financial-services l4-sd4eg


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The finanical services game has changed dramatically in recent years. You'd better have a game-changing strategy. Learn more about how to build trust with today's customers - invest in a serious differentiator that can change your business

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Lithium game-changing-social-strategies-for-financial-services l4-sd4eg

  1. 1. Game-Changing Social Strategies for Financial Services
  2. 2. share this whitepaper contents 1 21st Century Banking: Disruption, Defection, Extreme Expectations 4 Public Social Networks for FSI? Ineffective and Unpredictable 5 Own It, Don’t Outsource It 6 Customer Communities are Trusted Social Hubs 8 The FSI Social Advantage: Lots of Customers 9 Innovation as Game-changer: Barclaycard, FICO request a demo subscribe to SocialMatters Lithium social software helps the world’s most iconic brands increase loyalty, reduce support costs, drive word-of-mouth marketing, and accelerate innovation. Lithium helps brands to build vibrant customer communities that: reduce service costs with social support grow brand advocay with social marketing | © 2014 Lithium Technologies, Inc. All Rights Reserved drive sales with social commerce innovate faster with social innovation 2
  3. 3. share this whitepaper 21st Century Banking: Disruption, Defection, Extreme Expectations Recent fundamental changes in the financial services increasingly taking over a larger portion of the transaction marketplace have put the entire industry to the test. Trust pie. This means they’re also taking over the customer is at an all-time low, cost pressures are at an all-time high, relationship, and with innovative experience design, radically technology has exploded across mobile, digital, and cloud transforming customer expectations. The bottom line: Just apps; regulators are invasive (to say the least), and top line as they are for just about every other industry, banking growth is elusive at best. customers are transacting more and more online with disruptive brands who operate fundamentally new business models. And they’re interacting less and less with the more Financial Services remains the least trusted industry globally traditional, location-based company agents (eg: bank tellers). Source: Edelman Trust Barometer Importantly, because customer engagement—and subsequently, the customer relationship— happens at the point of transaction, financial service firms increasingly find their influence over the customer relationship waning. Not so long ago, all transactions happened in the branch and we still see legacy customer engagement strategies focused on branch activities—which is now wholly out of step with how customers want to engage. Eighty-nine percent of customers search the web before they buy and 67% search the web before making a service call. Further, more and more financial transactions now take 95% of all customer interactions in retail banking will be digital by 2020 place through disruptive competitors like Moven and PayPal, rather than traditional banks. As they do, these disruptors are 1,000,000,000 There are now 1 billion mobile banking users globally Source: CameoWorks 1
  4. 4. share this whitepaper What’s more, FSI customer expectations are now driven not Yet many banks have responded to the mass migration by branch or online experiences with competitors, but by the to digital channels by investing in even more in branch high standard of service and experience of the best online transformation projects. They still believe customers value companies. According to the Forrester Consulting Report, in-person contact with company representatives most when FSI—Claim the Customer Experience Advantage, 66% of they want advice or to purchase new products and services. consumers experiences from some companies raise their What they have failed to understand is that like all other expectations for experiences with all other companies. Your purchase journeys today, the FSI buyers’ journey is not linear. biggest competitor may very well now be Amazon. It involves a lot of research online before ever setting foot into There’s no more skirting the fact that the location of the customer experience is now online, and the owner of the relationship is now the customer. They decide when, where, how often, how much, and what services and products they a retail location. Today’s customers consult websites, online communities and with their online social networks for realworld insight and advice before ever interacting with brands they may purchase from. want; and they now compare the relationship they experience Forward-thinking financial services firms recognize they with their bank to those they have with consummate must find a way to reclaim the customer experience and own experience leaders like Apple. The bar has been significantly the customer relationship while still providing a personal, raised. Consumers demonstrate every day that they aren’t humanized connection. Increasingly, they’re turning to social going to settle for less. media for the type of differentiated customer experience innovation they need. FSI competitive set is getting complex transactions relationship data 2
  5. 5. share this whitepaper 3
  6. 6. share this whitepaper Public Social Networks for FSI? Ineffective and Unpredictable Though banking has certainly not led the social charge, some Facebook and the huge growth of new sites such as FSI firms have ventured out onto LinkedIn, Facebook, Twitter Pinterest and SnapChat. The place to be on social media and Google+, with the assumption that these are the best and today almost certainly will not be the place to be tomorrow. only places to be. Not so. It’s essential that financial services firms not concede their entire digital strategy to Facebook—or any other single Just 2% of customers who like a brand on Facebook ever return to the page public social network. Source: Social Media Today While these social media giants are popular, for customer engagement they remain ineffective. For banks that operate within the confines of regulation, they’re also unpredictable. 42% of teens considered Facebook the most important social network in 2012 Third-party sites like these make frequent changes to policies 33% of teens consider Facebook the and the user experience—all of which are outside your control most important social network in making them risky. Third-party post regulations (with complex 2013—a decrease of 9% adopt and entanglement issues to navigate) make the public Source: Media Bistro nature of mainstream social media sites thorny when it comes to interpreting guidance. Banks rely on disclosures on their social media profiles as a key preventative action, but there hasn’t been enough precedent to determine if that alone will hold up under examination. There is also the issue of being unable to predict where consumer attention will go next. Many forecasters once predicted that Facebook would not only dominate all social networks, but the entire web, eventually becoming the new corporate web site. Indeed, that has not come to pass and likely never will as evidenced by waning teen interest in 4
  7. 7. share this whitepaper Own It, Don’t Outsource It MyFICO community members spend 41% more on FICO products. The Barclaycard Ring community generates $10mm in annual benefit. The emerging key best practice is for financial services firms is to have an owned property at the center of their social strategy. Yet many just fold their social initiatives in to existing business processes as a new channel—an important and influential new channel perhaps, but a channel nonetheless. They get a Twitter account and a Facebook page and start tracking channel customers, capture their social conversations, develop new successes like fans and followers. They cheer as the channel insights, and innovate on the social customer experience. successes pile up, but eventually someone starts looking for the business success. Sadly, because they’ve adopted a channelcentric view of social media, very often no one can point to a single dollar saved or earned. Owned properties are far easier to manage and customize. They give you the advantage of being able to create truly unique social experiences for your customers that they will identify with your brand and not, well, with Facebook. You can create Smart businesses today realize that while social media might a unique social customer experience that gives customers a be another channel, an owned, on-domain social hub is a way to connect with each other—and, all within the framework collaboration machine—a mechanism for matching talent of FSI communication compliance. Connection is what your and knowledge with those who need it. They create online customers want, and it’s what you want. Because when you customer communities that give people with problems instant connect your customers with each other, social sharing begins access to those with solutions. They create engaging social and a vibrant customer community full of service, passion, and customer experiences that motivate and reward contribution. innovation follows. They develop knowledge bases where service questions and product solutions are owned, codified and easily accessed by anyone in need. And they make and/or save multi-millions per year in the process. Because customers trust each other more than they trust you, those who are passionate about your brand will generate more positive influence for you than your PR firm ever could. They want to create and curate content around your brand and The simple truth is that your customers aren’t looking for products themselves. They want access to trusted resources you on Facebook. If they’re passionate about your brand and (each other), and they want to hear what other customers have passionate about your products, they want to go to a place experienced. They want to problem solve together (which, by the where they can find and interact with others like them. It’s your way, means your customer service load goes down—way down). job to create that place. Facebook and Twitter are fantastic for When you create an authentic, transparent place for them to reach and to broadcast messages, but your own social base do this, you start relating to them in a way they understand and camp is a must-have. It’s the only place you can engage your value. It’s a win-win for all. 5
  8. 8. share this whitepaper Customer Communities are Trusted Social Hubs If we give our customers free reign, won’t the squeaky wheels corporate asset. A vibrant social hub filled with UGC sets get all the attention? A common concern. you apart as the trusted resource for your customers—and Yes, but they are already saying bad things about you. Isn’t it better to listen and be part of the conversation? Absolutely. Here’s why: 1. There is no better source of feedback and ideas for improvement than the criticism of your customers. You should be encouraging them to tell you what they don’t like as well as what they like. 2. When customers do have negative comments, it is no industry needs to build that trust more than financial services. For your brand to become the go-to place for information, learning, and discussion, social conversations must brought into the mix and used for problem solving, brand evangelizing and loyalty inspiration—all the key drivers of social engagement. Communities are also a key element in crowdsourcing, a prime resource for customer opinion and a place to develop and test new products. When you own the property, populate it with trusted content, and facilitate community engagement, exponentially more powerful to have other customers social customer relationships become a vital part of the come to the defense of your brand rather than your brand identity, not just another communication channel. customer service team. That’s why customer communities are the beating heart of social strategy—they put trusted content at the core. Trusted user-generated content (UGC) is thought leadership by credible subject matter experts from your brand—your customers. Because customer communities drive real engagement, they are fast becoming the new must-have 6
  9. 9. share this whitepaper Do customers want to be “friends” with their bank? It’s The key to having a community in a highly-regulated a question many financial firms wonder as they witness environment, where privacy must be strictly protected, is to the popularity of other brands on social media networks. create a place where customers own the decision to join the “Friends” may be a bit strong, but customers absolutely do community, as well as determine their level of engagement want to have a trusted relationship with their bank. More and interaction within that community. When you own your importantly, they want access to other customers. They want social media property, you can customize it to provide security a place to belong, a place to interact, and they want that place and privacy options that meet compliance while at the same to be full of trusted information. time respect your customers’ individuality. Creating rules All this said, another common concern for FSI firms around social media is the fear that consumers won’t talk about finances in a public forum. The truth is that consumers find FSI products complex and intimidating to purchase and use. of engagement for interactions helps to keep community members (and staff) mindful of how a financial services social community differs from other social media sites, including their own familiar usage of Facebook. They want to be better informed—independently—so they are more empowered before engaging with an advisor or agent, yet they are reluctant to discuss their finances with friends or family. Online communities are perfect places for FSI customers to gather information from others like themselves in an anonymous setting. In the My FICO customer community, for instance, customers routinely share their actual credit scores (clearly a sensitive topic) in order to gain more insight and advice on how to boost them. 7
  10. 10. share this whitepaper The FSI Social Advantage: Lots of Customers One of the built-in advantages financial services firms have expectations. Forward-leaning FSI firms are responding when it comes to social interaction is a large customer base. to that need by creating personalized, adaptive, responsive FSI communities can scale quickly, provide relatively high social customer relationships. Make no mistake, this feat interaction, and deliver “big data” insights on consumer requires a a major mind shift such that banks must: behavior, opinion, and needs. An error some firms make is seeing social strategy as just another channel. They enhance the user interface on their current website, create a few mobile apps, Tweet promotions or bank events and call it a social strategy. But to leverage the full power of social and meet the extreme expectations of today’s consumers, financial services firms need to see social as a transformative business strategy; not just another communication or marketing channel. Social is the new expression of the heart and soul of business, and must be at the center of all business functions, including risk management, compliance, marketing, operations, and 1. create one single vision of the customer. 2. empower frontline employees with access to data on every customer. 3. facilitate and train staffing to be responsive in real-time. 4. provide the same high-level service experience at every touch point. This shift creates deeper engagement with customers no matter where they’re located. And lest you think that the traditionally conservative financial services industry will always be a social media laggard, the wheels are in motion. training. In other words, social needs to become the way you The rewards of leveraging the power of social in financial do business and not just the way you keep in touch with services are not temporary. This is how business of the future social customers. will exist—now is the time to grab the lead. Because customers have become used to best-in-class social brands like Amazon and Uber providing ease of use, convenience, and connectedness, they now extend these high expectations to their financial service providers. Customers want the power of shared information. They want data that makes them smarter and they look for that in customer Consumers today basically want to engage with “The Bank of 9 out of 10 financial service companies now use social media and their focus is shifting away from generating awareness to community engagement. Me”—one that precisely meets their unique set of customer Source: PeopleLinx communities every day. 8
  11. 11. share this whitepaper Innovation as Game-changer: Barclaycard, FICO By now, most financial services firms have realized that unless they innovate, they’ll die. Not only have the last several years proven that innovation is king in business model reinvention, but that it’s also critical in rebuilding trust among consumers. Consumer expectations for smooth, responsive online interactions, service, and community; the fast pace of innovation in financial data aggregation, payment systems, and alternative banking services—all this disruption leaves you with little choice. Reinvent and innovate. And do it now. Traditionally, firms have hired consultants, conducted market research, and formed committees to determine what customers want. Today, they can do it far faster and simpler: by building customer communities and tapping real customers. larger than any internal or consulting team Barclay’s could Customer communities where customers engage, interact, have assembled, it launched with unprecedented features. and provide feedback help banks create products, services The Ring card is an enormous differentiator for Barclaycard, and modes of delivery that align with what their customers setting it a world apart from the competition. Take a look truly want and need. Communities are excellent at crowd- at what Barclaycard Ring card members get. Notice how sourcing R&D with their much larger pool of ideas, concepts radically different it is from anything you’ve experienced from and feedback than any outside R&D firm could possibly offer. a credit card company in the past. Barclaycard Ring Member Benefits: Case in Point: Barclaycard Ring BarclayCard tapped the power of the crowd—their card members—to help build a better credit card experience. They launched an online community, encouraged members to exchange ideas and vote on product features by giving them 1. Full transparency—insight into how Barclaycard Ring makes money, including metrics on Ring’s financial performance. 2. Continued influence over the offering—a chance to “credits” for participation. Today, we have Barclaycard Ring— guide Ring’s benefits, rates, rules and penalties through the world’s first crowdsource-designed credit card. Because an idea submission and peer evaluation system.

 the pool of ideas offered by community members was much 9
  12. 12. share this whitepaper 3. A share of Ring profits—including options to donate profits to community-chosen charities. 4. A robust social experience—topical forums, ask-andanswer, idea-sharing, polls, blogs, and credits earned for community participation. What was the first thing Barclaycard did right? They approached social as a potential collaboration machine, not as just another channel. This unique and innovative initiative has delivered a 50% decrease in complaints and a 25% increase in customer retention—an annualized benefits of over $10MM. The moral of the story is that social offers a good deal of tried and true benefits, but it’s also a place where we are free to re-think our customer relationships entirely. Barclaycard approached their Ring customers not as sales targets, but as potential partners in the business. The rewards of innovation are not one-sided. Customers engage deeper and commit to brands when they feel their opinion matters. Passionate customers bond with other increases in search engine optimization. Nearly eight million customers, who in turn, bond with the brand. Innovation posts are read per month and 39% of the search traffic to in how firms relate to customers – beyond new products, consists of users landing on URLs in the MyFICO services, and user-interfaces – transforms customer community. The community is now a major driver of the experiences so that they have a relationship with the brand. top of the sales funnel activity for FICO products such as This increases loyalty—and in a day when it’s easier than ever credit reports and credit monitoring services. The company to switch banks, loyalty is critical. reports that customers in their third year after community registration spend 41% more on FICO products than customers who are not community members. Case in Point: My FICO Innovation is key to meeting customer expectations, but it’s Not only can innovation in community drive value and loyalty, also essential for brands to thrive. Social communities create it can also drive business growth. Lithium worked with the connection, conversation and most importantly, remind Fair Isaac Corporation, the creator of the famous FICO score, consumers and companies that at the end of the day, it’s to build the My FICO customer community. As the volume people and the way we relate to each other—not technology— of trusted content and user-generated content has grown that empowers us. Social strategy is not an add-on, but fast to 20,000 posts, the company has experienced significant becoming a game-changer for FSI firms who do it right. 10
  13. 13. share this whitepaper 1. McKinsey & Co 2. Lithium-commissioned Forrester Report: FSI Firms—Claim the Customer Experience, Now! 3. PeopleLinx About Lithium Technologies: Lithium social software helps companies unlock the passion of their customers. Lithium powers amazing social customer experiences for more than 300 iconic brands including AT&T, BT, BestBuy, Indosat, Sephora, Skype and Telstra. The 100% SaaS-based Lithium Social Customer Experience™ platform enables brands to build and engage vibrant customer communities to drive sales, reduce service costs, accelerate innovation and grow brand advocacy. For more information, visit,or connect with us on Twitter, Facebook and our own community–the Lithosphere. Lithium is privately held with corporate headquarters in San Francisco and offices across Europe, Asia and Australia. The Lithium® logo is a registered Service Mark of Lithium Technologies. All trademarks and product names are the property of their respective owners. 11