Social media has been swiftly
gathering converts in retail and affluent banking circles, but
private banks have been much more hesitant about how to use it
effectively. Galen Stops surveys how the world’s top wealth
managers are using social media and speaks to two banks about how
they utilise it.
Go deeper with GlobalData
Private banks have traditionally
been reluctant to embrace digital platforms, despite the widespread
use of social media in the past few years.
High net worth individuals (HNWIs)
are already using secure online forums. In last month’s issue
(PBI279), PBI reported on Family Bhive, an online
community where HNWIs have been meeting and interacting with other
wealthy investors since 2009.
Now, as their client base becomes
increasingly younger and accustomed to using social media, private
banks are having to think hard about how best to use this 21st
century technology.
After assessing the social media
presence of some of the world’s largest private banks and wealth
managers, PBI found that currently private banks are
largely ignoring the main social media sites of Facebook, Twitter
and LinkedIn.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataOf the three of these sites,
Twitter is the least popular among private banks, with just 21.8%
of the banks included in the research having a Twitter account.
Flirting with
Facebook
The majority of
private banks in the study, 63%, are on Facebook. However, this
statistic can be misleading when considering the extent to which
these banks are actually active on the site.
For example, Barclays Wealth, which
according to our research was the third most ‘Liked’ bank on
Facebook, managed just 388 ‘Likes’ across three pages.
Most of the top 20 banks on
Facebook have less than 100 ‘Likes’ and only the top two have over
1,000.
Even on the Facebook pages
themselves, most of the banks offer little by way of useful
content. Many of these pages have no information on them and those
that do often appear designed purely to drive traffic to the bank’s
regular website.
Banks cagey about
social media
Out of the social media sites
examined, LinkedIn proved the most popular among private banks.
75% of the top 20 banks on LinkedIn
have more than 1,000 followers and a number of banks who have
little or no presence on Facebook or Twitter are much more firmly
established on LinkedIn.
Merrill Lynch had by far the
biggest presence across Twitter, Facebook and LinkedIn, yet when
PBI contacted them we were told that they do not comment
on their social media policy.
Other private banks that we spoke
to have similarly been cagey when discussing their social media
strategy. It seems that the banks are quietly developing social
media offerings aimed at the next generation of private clients but
are reluctant to reveal details that could be imitated by
competitors.
Security
conscious
When asked why
private banks have thus far mostly ignored social media, the banks
have cited security, privacy and regulatory issues added to the
natural conservatism of the private banking industry.
Lisa Worley, head of marketing at
Barclays Wealth, believes that private banks have not utilised
social media due to strategic uncertainty.
“Many wealth managers are yet to
fully evaluate and understand the potential of social media
platforms,” she said.
“In the absence of a proven roadmap
to follow, a successful social media presence requires strategic
thinking.”
Ian Ewart, head of products,
services and marketing at Coutts, agreed with Worley’s
assessment.
Ewart said: “Banks have broadly
held back from social media because they are looking to see where
they can add value for clients.”
The relevance of social
media
He also commented that although
there is a temptation among banks to follow the crowd, they must be
conscious that every channel they set up is relevant for
business.
Which of course begs the question:
is social media relevant for private banks?
Both Worley and Ewart are of the
opinion that the increasing use of social media among their client
base ensures that these sites are, and increasingly will be,
relevant to private banks.
“Private banks cannot continue to
ignore social media,” Worley told PBI, explaining that
“digital media consumption amongst high net worth individuals is
increasing, as is their trust in the information received from
social media sites”.
Just another marketing
tool?
Ewart similarly
argues that social media is relevant for private banks because
their client base is increasingly mobile and increasingly uses
social media sites.
He cited research that shows social
media now accounts for more than a quarter of the world’s entire
time spent online.
But given that Coutt’s “primary use
of social media is to have a presence where clients and prospects
are”, it seems that they view social media as being relevant
primarily as a marketing tool.
This perspective is only enhanced
when Ewart talks about using social media to “position our brand”
and “communicate our narrative”.
But while Coutts apparently views
sites such as Facebook, Twitter and LinkedIn as being relevant
primarily for marketing purposes, they are exploring ways that
social media can offer a wider value.
New social media
model
Last year, Coutts launched the
Coutts Knowledge Exchange, an online social network exclusively for
clients and prospects.
On this network members can access
articles and reports on wealth management, engage in topical
discussions with other members and participate in interactive
forums with experts from around the world.
This social media model effectively
side-steps a number of the issues, real and perceived, that
discourage both banks and clients from interacting via a social
media site like Facebook.
On a bank’s private network they
are responsible for providing a level of security necessary for
their clients and these sites can be more specifically tailored to
their clients’ needs.
Client-only social
sites
Perhaps more important than these
issues is the ‘exclusive’ element of such sites.
By ensuring that it is available
only to clients of the private bank, such a social media site
ensures that members are interacting with peers, something which is
very important.
It is why, out of the social media
sites we researched, LinkedIn proved the most popular among private
banks – because the people on the site are, generally, business
people with a knowledge or interest in the industry.
Coutts is not the only bank to have
realised that this is currently the most effective social media
model for private banks. PBI understands that other banks
have developed similar internal websites but are unwilling to
publicise their efforts.
Banks may be reluctant to engage with social media, but clients
are only set to demand greater connectivity.
