Social Networking & Financial Services

Speaking of Institutional Investor; their flagship print publication, which comes out once every two months, allocated a page in the current edition to a topic that we've been espousing since we started blogging here a few years ago; using digital social networking applications as a means to enhance their respective brands, and connect more closely with their clients.

Here's the first two paragaphs of the article...
Financial services companies are getting personal. They are adopting the techniques of social networking — blogs, online forums and chatrooms more commonly associated with trendy virtual communities like Facebook and MySpace — to engage and communicate with their (generally younger) customers and come up with new product and marketing ideas.

An October report by Corporate Insight, a New York–based research firm that tracks financial industry services and strategies, indicates just how rapidly social networking has been spreading through the once-stodgy world of finance. In spring 2007 there were just a smattering of blogs and other interactive features, often lumped under the Web 2.0 rubic...now, 11 of 70 companies polled in the study have incorporated social media into their Internet platforms, and 70% operate "online communities serving self-directed investors or small-business owners.... ..Some firms have also started usings blogs and forums to serve clients and prospects alike.."

For those with half empty glasses, 1 out of 7 might not be a trend worth following. But when learning that Charles Schwab increased its Gen X client base by a whopping 32% as a result of feedback garnered via its online blog research, that makes the stodgy financial marketers wish they had cleaned off their glasses when this blogger was pounding the tables on the topic as recently as last year.

Yes..for a financial services firm, on-line applications that facilitate open communication between customers and between customer support staff presents a variety of compliance issues.

But one would think that a 32% increase in customer accounts might be worth throwing a dozen or two bodies at the opportunity. We'd be happy to lend a hand or some guidance to those financial service firms that think out of the box.