Corporations built around social networks such as Facebook and Twitter are among the hottest technology companies in the world. The ability to keep up with these new Web 2.0 technologies may determine whether a company can remain competitive in today’s market. But investing with collective intelligence is a paradigm shift. We can see it from some successful examples, like www.mint.com, www.wikinvest.com and continually growing startups, like www.kalengo.com. Meanwhile customers in financial service industry are adopting a more self-directed approach and seeking a transparent environment in which to build trusted relationships online.
What are the characteristics of Social Media?
● Mutual participation and contribution – Users form trusted relationships online.
● Streamlined activities – Connections stay current on each other’s activities and opinions.
● Collective Intelligence – By sharing, following and exchanging information, users can benefit from the experience of others.
Why should enterprise care about Social Media?
Socially networking supports an informative and business generating experience. Corporations are making their presence in social media and social networking in order to boost brand recognition, user experience, sales and marketing, etc. One example is Starbucks Coffee. The company launched mystarbucksidea.com, an open online forum where customers submit their ideas on how Starbucks can improve or innovate. According to market research from Freshnetworks, 50,000 ideas were submitted in the first 4 months as well as thousands of blog posts and customers conversations regarding the brand.
Why should enterprises care about social media? In short:
● Enhancing Customer Loyalty – Builds a community around a brand. Creates direct conversation with customers.
● Building Company Image – Expresses corporate mission, culture and personality in a cost effective way.
● Conducting Viral Marketing – Leverages intangible assets and the power of word of mouth advertising (speedy dissemination).
Why should finance bother with Social Media?
By integrating social components into its user interface, financial websites make it possible for customers to easily communicate financial information with trusted connections, have discussions with like-minded individuals, learn from experience of others and form mutually beneficial online investment communities. Protectionism, as we know it, is strong in the financial service industry, yet finance demands more for real-time and reliable information. Digital transparency is creating reputable value and enhancing customer confidence. A friend of mine worked with financial service startup named Kalengo.com. The company specializes in building an open and extensible financial social platform. From the first-time, novice buyer to the privileged group of industry professionals who receive preferential treatment, individual investors get an idea of overall trend and statistics; such as the most bought and sold stocks, average prices and lot sizes, and so forth. Individuals are able to counter the information asymmetry that has traditionally put them at a disadvantage compared to financial institutions and financial services professionals, and thus, making a better and more informed investment.
Social media is taking the financial service industry by storm. Some may use it to enhance customer loyalty, others to generate potential leads and utilize its viral marketing benefits. Whatever the case, we can see more and more startups creating new and innovative ways to fully utilize the power of social media; a powerful tool that should not be ignored.