Social media has changed the way we communicate in our personal lives, and it has begun to change the way we communicate professionally too. Historically, financial services firms have been amongst the slowest adopters of new technologies.
A 2011 McKinsey & Company report showed that the financial services industry was the second slowest sector to adopt social technologies.
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The importance of security
A major obstruction to adoption in the financial service sector is the often-sensitive nature of the information being shared.
That sensitivity means security; compliance and privacy controls (visibility and control over how and with whom information is shared) become a paramount concern. These are all things not readily associated with consumer social networking sites like Facebook and Twitter.
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By GlobalDataWhich is why, when it comes to social networking and financial services, the focus is increasingly on enterprises having their own social networks rather than using consumer sites. Alumni networking is already well established and enterprise social networks are the new focus area.
But in the main it’s experimentation by early adopters within organisations. One challenge becoming increasingly apparent is that, beyond security and compliance, the culture in financial services is one of ‘selective’ rather than open collaboration.
Compliance to share better
Compliance teams can get involved, acutely aware of the dangers of people sharing the wrong information with the wrong people.
However, we know that done in the right way, with the right controls, financial services companies could hugely benefit from more collaborative ways of sharing information.
We are constantly getting feedback from our clients validating this. Where enterprise social networking is implemented in a controlled, compliant environment, it unlocks corporate potential, bridging silos between teams and enhancing visibility across departments and geographies. This leads to better collaboration and new opportunities.
Having a central bank of information means that corporate knowledge is preserved, duplication of effort is decreased and employees are able to leverage formerly lost expertise.
Driving efficiency
Another perceived barrier for entry is the pressure to cut costs and boost efficiency in the current financial environment.
I say ‘perceived’ because enterprise social networking is all about driving efficiency – efficiency of communication, collaboration and decreasing the blizzard of email that we all struggle against every working day.
Implementing an internal social network in an organisation does not need to be a huge investment, and even in the short term can generate savings through communication efficiencies and generate revenue through better serving client needs
Our own enterprise social network, IdeaPlane, was created for organisations to take advantage of all of this, but with enhanced capabilities to see and control the sharing of information in a manner that financial organisations require.
What the future looks like
Over the next year I expect experimental use of enterprise social networks to continue to grow in financial services.
Early adopters will reap the benefits of better and safer communication, collaboration and knowledge sharing. Following that, we expect to see a massive shift as broad adoption of enterprise social networks takes hold across financial services.
Eventually we expect all companies to have a ‘social engine’ at their centre, where users will discover the information most relevant to them.
This place is the newsfeed, which will collate both information from a user’s network, or ‘social graph’ (like Facebook) and information they subscribe to, or ‘interest graph’ (like Twitter).
The CRM, HR database and other data sources will feed in to this central newsfeed, so that much like the newsfeed on Facebook has become the personalised newspaper for a user’s social life, this will become the personalised newspaper for the user’s professional life,
The financial services industry has only scratched the surface in terms of harnessing the power of social networking.
Once it is understood that there are secure, compliant solutions with the requisite control to reflect working habits in highly regulated environments, then the potential to unlock corporate value will begin to be realised.
