Mikaal Abdulla | November 17, 2011
Virtually every other consumer industry such as retail, media, and travel has been completely transformed by the Internet. But why has financial services remained largely stagnant when it comes to innovation and empowering the consumer? The reason is that financial institutions have historically profited by the one-way flow of information. To date, the majority of us have been reliant on institutions and advisors to provide us with research and investing ideas. Social networks are about to shatter this convention.
According to ADMA, social networks have a 76 percent reach in Hong Kong. Three point eight million people in Hong Kong have a Facebook account, which is an astonishing 78 percent of the city’s total online population (Source: Social Bakers). Now let’s overlay that with the fact that 67 percent of investors have an online brokerage account. Just like a decade ago, when the Internet opened a window to market information, social networks will do the same for unlocking investing ideas and knowledge from individuals. And how we shape, filter, and listen to those ideas is in our individual control.
Investors are social animals and like to exchange ideas. Let’s admit it: virtually all of our conversations in Hong Kong revolve around family and friends, real estate, and the stock market. Social networks are now making this transparent exchange of ideas possible through trusted connections and away from the noise of the bulletin boards or the advice of a 25-year-old broker with no real experience. I can now have access to the opinions of people who are really making the trades, have great ideas, and are willing to share them.
I have been involved in this sector in Hong Kong for a decade both as a marketer and business manager. All I can see is opportunity and the opportunity is social.
Financial services is a large and very important market in Hong Kong that touches all of us and yet it is one of the most traditional. A recent study of brokerages showed that only 8 percent of their annual marketing spend last year was allocated online with over 90 percent pushed to traditional media such as TV, print, and outdoor.
I have personally canvassed most of the banks and brokers and they simply don’t have a social presence. Those that do maintain a one-way conversation and fail to truly engage their customers. Their marketing and communication strategies can be summed up in one action and that is push!
I believe the consumer financial services companies that want a future must evolve quickly to stay in step with the consumer. Institutions must make their websites interactive rather than static and closed. They must give clients the ability to personalise their own experience rather than the one-size-fits-all approach today.
Let customers build communities both internally but also publish to their own external networks. Pay attention to the power of social interaction and give customers a voice. It is less about building brand awareness on the side of a bus and more about building a real connection. What these companies must understand is that their services are a commodity, but their customers’ voices and ideas are real. They can either harness them for the benefit of all or lose them forever.