Social media: More than just a passing fad say bankers

Social media: More than just a passing fad say bankers

Finextra's international series of social media events kicked off at Thomson Reuters' London headquarters today, with participants from the financial services industry chewing over the opportunities and pitfalls presented by the likes of Twitter, Facebook and LinkedIn.

A packed room saw the day's speakers successfully spur debate and comment, forcing the event hashtag, #finxsm, into the London Twitter trending charts.

The retail and business-to-business panels both wrestled with the central question of what social media is for: a PR, communications and marketing tool or something more fundamental which needs a quantifiable return on investment (ROI).

Thomson Reuters' Yvette Jackson revealed that building relationships through its chatrooms has led to real money for the company, directly contributing to the sale of hundreds of terminals.

However, Hakan Aldrin, MD of the Benche at SEB was blunt when asked if he has numbers to prove the value of the community platform: "No. That's not what it's for."

Allan Schoenberg from CME was even more dismissive of the ROI argument, pointing out that firms do not measure all news releases or conferences in this way so "get off my back".

Explaining how CME's social media presence began, Schoenberg revealed that four years ago he discovered that a customer in Denmark had created a CME Facebook page. His first reaction was "how do I shut this down?" but this attitude gave way to "how do I leverage this?"

In a room full of social media enthusiasts, Sarah Carter from Actiance provided a sober reminder of the reputational and regulatory risks involved, highlighting poor practice from several firms, including Nestle, which took to Facebook to challenge critics and inevitable came off worse.

However, Carter's ideas on linking the personal Twitter, Facebook and LinkedIn accounts of staff to internal audit systems to help manage problems attracted some concern, with HSBC's Aden Davies describing the prospect - on Twitter of course - as "terrifying".

On the retail panel there was consensus among Davies and Rachel Hunt from Financial Insights on the importance of having 'real people' behind Twitter accounts, with strong rejection of automated response systems to reply to queries - an idea reportedly being trialled by some US firms.

This point was neatly made later in the day. As representatives from first direct explained its approach to social media, the virtual bank's Twitter account was being put to good use, apologising to a customer who had noticed its Web site was down and updating him on the progress of its rehabilitation.

In the final panel of the day participants looked to the future and how social media will evolve over the next five years. The speakers were united in their belief that we are set to see an explosion of data, especially through smartphones, and Davies predicting the emergence of a second Internet just for machines by 2016.

How this information is used and the privacy implications are still unclear but the ubiquity of the tools means banks cannot afford to sit back and wait for a clear path.

Finally, demonstrating the open nature of the medium and perhaps revealing why it still scares some bankers, a dissenter, @MODERN1ST, self-described "anarchoid petit-bourgeois deviationist running-dog lackey of the most reactionary elements of international finance capital" used the event hashtag to express disgust at banks' "UGLY" use of the form.

Finextra's rolling series of international social media events decamps to New York next month, where top executives from banksimple, Citi, StockTwits, Aite Group, Deutsche Bank and Wells Fargo, among others, take to the rostrum. Registration is open now.

Comments: (2)

Gary Wright
Gary Wright 07 April, 2011, 18:17Be the first to give this comment the thumbs up 0 likes

Very well done today Finextra team. This should wow them in New York. Great coverage of the topic and although not totally agreeing with some of the debate it was non the less good to hear it

Ravichandran Ramanuja
Ravichandran Ramanuja - On a Break - London 07 April, 2011, 23:14Be the first to give this comment the thumbs up 0 likes

Very interesting comment from Hakan Aldrin. I recently interviewed the head of Digital Marketing of a beverage brand and he had the exact same comment. I dont measure ROI - it's very premature, and valuation would be similar to (at best) measuring brand value. Nice to hear what I've always felt endorsed by one of the biggest companies in Social Media (Financial Services only)