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Makovsky Wall Street Reputation Study Finds that Compliance Issues Complicate Financial Service Firms' Use of Social Media [Professional Services Close - Up](Professional Services Close - Up Via Acquire Media NewsEdge) The social media findings of the just-released 2014 Makovsky Wall Street Reputation Study revealed that social media has become more important than other marketing initiatives, according to 68 percent of senior communications, marketing and investor relations executives at financial services companies. In its release, the company said that the number of financial services firms using social media to combat negative perceptions with external audiences nearly doubled from 2013 to 2014. However, the study also found that while its effectiveness was on the rise, social media still trailed many traditional marketing and communications channels to improve external perception, according to the executives. The financial services industry overall has been slow to adopt social media because of complex compliance issues. Most of companies in this sector only have partial social media strategies. In fact, 71 percent of executives agree that compliance at their company restricts the use and application of social media, while 63 percent say it is difficult to agree with compliance and attorneys on the use and expansion of social media. The findings indicate a pent-up demand among marketing and communications executives and they are pushing the social media agenda forward. Eighty-five percent (85 percent) of executives said more time will be spent on social media activities this year compared to last year, while 84 percent of executives plan to investment more in the creation and distribution of content than last year. The study revealed a greater competency in social media with 80 percent of executives who believe their management understands it. "Financial services companies are searching for ways to improve customer satisfaction, further their position, and stem losses," said Scott Tangney, Executive Vice President at Makovsky. But when it comes to social media, it is catch-up time for financial services firms. It promises many benefits and we are seeing increased activity within the industry. However, executives are reporting that they still face obstacles, including getting through the compliance gauntlet, controlling the message, and limiting negative outcomes." The third annual Makovsky study uncovered the formidable cost of negative perceptions for financial services companies. Executives estimated a business loss of 27 percent equaling billions of dollars over the past two years as reputational and customer service issues drag on performance. Financial Services Firms' Reputation and Social Media: The Good and The Bad Seventy-three percent (73 percent) of executives believe that social media has improved their company's reputation, and 72 percent agreed that using social media allows their companies to provide better customer service and response than other communications channels. More than seven in 10 (73 percent) financial services firms use Twitter and Facebook to conduct customer service. Executives agree that some of their company's top uses for social media includes: -Distributing thought leadership education content (81 percent) -Engaging customers and investors (81 percent) -Quantifying sales (77 percent) -Carrying on conversations with stakeholders (77 percent) However, 56 percent of executives believe their social media efforts have created more problems than benefits. More than seven out of 10 executives said that controlling the messages on social media is hard to do, with two-thirds (67 percent) reporting that more negative conversations about their company surfaced on social media versus traditional media. Targeting new customers is one strategy to shore up business. Eighty-four percent (84 percent) said engaging in social media allows financial services firms to reach a younger audience. Employee Communications Indicating a shift beyond traditional intranet and internal communications, the vast majority (83 percent) of companies are using social media as an employee communications tool to keep staff informed about company news. Employee ambassador programs at financial series firms are also on the increase, year over year. For three years in a row, The Makovsky Wall Street Reputation Study has revealed concern among most companies about negative employee perceptions related to the company and its products and services, management related to the financial crisis. In addition, employee communications ranks second in terms of issues critical to building a strong reputation. "It makes sense that companies embrace social media for employee communications, especially with the emphasis on employee engagement and the increased use of mobile devices to consume information over social channels," said Tangney. "Executives are strongly indicating that social media works better for certain things and that it can be a double-edged sword." Makovsky is an integrated communications firms. More information and complete details: www.makovsky.com ((Comments on this story may be sent to [email protected])) (c) 2014 ProQuest Information and Learning Company; All Rights Reserved. |