Business Editors
NEW YORK--(BUSINESS WIRE)--October 29, 2008--Corporate Insight today released a new groundbreaking report detailing the evolution of social media - such as blogs, forums and online communities - among major financial services companies, providing a clear understanding of market trends and leading tactics. The research reveals that social media is beginning to reshape the way financial services firms communicate with their customers, as well as how investors interact with each other.
Corporate Insight, a market research and consulting firm, conducted a comprehensive analysis of social media features used by nearly 70 financial institutions, including brokerage firms, banks and credit card issuers, annuity issuers and mutual fund companies.
The report, ?Social Media: Trends and Tactics in the Financial Services Industry,? indicates that 15% of the firms that Corporate Insight researched have added significant social media features to their online platforms in 2008, 70% of which have developed full-fledged online communities.
?Two years ago, very few financial services companies offered social media features,? said James McGovern, Vice President of Consulting Services at Corporate Insight. ?That was before social media really exploded in popularity. Now, sites like Facebook and YouTube are some of the most recognized destinations on the Web. Financial institutions are beginning to understand that customers want the ability to share knowledge with fellow customers, especially given the challenges posed by today?s investing landscape.?
Overall, the report found that online communities are rapidly growing in popularity but companies are using them for a wide variety of reasons, from collecting customer feedback (Schwab) to educating and marketing themselves to clients and prospective customers (American Express). In addition, many self-directed brokerage firms have embraced social media, using online communities to engage clients and provide a platform for investors to communicate with each other. It is also noteworthy that none of the full-service brokerage firms Corporate Insight monitors have entered the social media fray to date.
Following are some of the key findings from the report:
Brokerage Highlights
Six of the 20 brokerage firms studied have YouTube Channels.
OptionsXpress, Scottrade, Vanguard, Wells Fargo
and
Zecco
all feature investing ideas and tools available on their website, while
E* Trade
simply reruns their TV commercials.
Both
TradeKing
(10,700+ participants)
and
Zecco?s
(38,000+ participants)
communities feature open membership with full participation for individuals whether or not they have an account. In addition, members who hold accounts are allowed to display their portfolio performance on a percentage basis.
Schwab
and
Scottrade?s
online communities are for customers only. Schwab?s (approximately 4,200 members) is restricted to active traders who make more than 36 trades per year, while Scottrade?s community (approximately 8,000 members) is open to all clients.
TD Ameritrade
offers a sentiment tracking tool on its website that allows clients to vote on the daily performance of a stock and see how other traders are voting.
Fidelity
has taken a cautious approach to social media; the firm hosts a community for its WealthLab Pro users but not for its broader client base.
Banking and Credit Cards Industry Highlights
Eight of the 20 banking and credit card firms tracked have YouTube channels.
Bank of America
and
Citizens Bank
feature content from their viral marketing campaigns and
American Express
devotes their channel to their philanthropy, MemberProject initiative.
Wells Fargo
was one of the earliest adopters of social media, participating in the virtual world Second Life before branching out with its own Stagecoach Island community targeting Gen Y customers.
American Express
,
Bank of America
and
Capital One
have also developed their own online communities to serve small business owners.
Visa
has launched its own Facebook application targeting small business owners, a one-of-a-kind in the industry.
Annuity Issuer Highlights
Annuity issuers target older consumers who are the least likely to participate in social media.
Only two firms,
AXA
and
TIAA-CREF
maintain online communities directed at retirees.
New York Life
lets public site users rate and bookmark pages using popular share sites like Digg.
Mutual Fund Companies
While mutual fund company executives expressed a strong desire to incorporate social media into their business models, none had any concrete plans and most say they are being held back by compliance departments. Corporate Insight also believes that a conservative approach to the Web is partially to blame for fund companies? inactivity in the social media space.
T. Rowe Price
does utilize social media for internal training of seasonal tax representatives.
Corporate Insight?s findings suggest that while financial services companies have embraced social media and are beginning to incorporate it into their business model, most firms are still experimenting with best practices. ?We?re at the beginning of a major new development that will have a significant impact on the way firms serve Generations X, Y and beyond,? said McGovern.
An executive summary of Corporate Insight?s report is available to the media upon request.
About Corporate Insight
Corporate Insight currently provides a comprehensive selection of syndicated research to 90% of the top financial service companies within the Fortune 500, representing 70% of the brokerage industry and 60% of US banking assets. Its expert analysts compile highly detailed research audits that deliver a unique, firsthand understanding of financial service product offerings. All of Corporate Insight?s research is compiled through personal interaction with each website. Further information from Corporate Insight is available at
http://www.corporateinsight.com
.
Intermarket Communications
Stephanie DiIorio, 212-754-5181
sdiiorio@intermarket.com
State Keywords: New York
Industry Keywords: Social Media; Professional Services; Banking; Finance; Other Professional Services; Communications
Source: Corporate Insight
