Social Media, Financial Services and Customer Driven Markets

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Guest Post by: Jo Stratmann

As we’ve already looked at the increase in niche online communities and how this could impact the future role of social media in financial services, this blog post will look at another key topic from our senior level executive round table event: customer driven markets.

The current situation

With the rise of social media, financial service businesses have started to think less about controlling their brand and more about how they manage their presence on the social web. Social media and online communities have given consumers the opportunity to easily discuss online what they want, and don’t want, from a product or service. In this way, the consumer is slowly but surely influencing the market place.

In general, financial services brands have been somewhat slow on the uptake when it comes to letting their consumers dictate their offering. There is one area of the industry that has taken this on board, though it’s a relatively new emergent in the market – social lending.

Social lending sites like Zopa and Prosper are consumer focused online marketplaces. Members of these communities borrow and lend money to each other, avoiding  traditional banks and ensuring that the consumers themselves have more control over the transaction, as well as giving competitive interest rates.

Zopa, for example,  also has a place for members to meet up and discuss all things Zopa – be it lending tactics, where they see Zopa going in the future, or even what they don’t like about the site. This allows Zopa to tap in directly to their customer’s needs, helping them shape their offering based around the demands of the customer.

What does the future hold?

More and more financial services brands will learn to embrace their customer’s opinions and realise that they are shaping the market place.

Reviews, blogs, forums, and tips and advice sections will appear more frequently on both branded and non-branded sites and the financial services industry will realise the value of not just listening to, but also acting on their customer’s conversations and suggestions.

Sites like Zopa are already challenging and reducing the market place of the more traditional lenders. As more and more social-based entrants emerge, this reduction is likely to continue unless financial service institutions get more creative in how they address the needs of their customers.

A good example, from another industry, of where things are heading for financial services could be the Patientslikeme site. Patients like me is an independent community for patients who are suffering from illnesses. It is a place to share information about their conditions and treatments, providing support for other patients. Traditionally this advice comes from hospitals, doctors or other traditional medical sites like the NHS, not an independent community of people.

What’s more, with  over 80,000 unique visitors a month and 65,000+ members, Patientslikeme is used by pharmaceutical companies as a source of reliable consumer insight; it is helping to shape the pharma marketplace.

Could something like Patientslikeme be the future direction for financial services brands? Perhaps independent communities of people, where the site is built by the community itself, discussing, say, loan options, will influence the financial services market place by providing valuable, actionable consumer insight to financial services brands. It remains to be seen…

Our next blog post will look at the issue of transparency in relation to social media and the financial services industry.

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