SOCIAL MEDIA FOR WEALTH MANAGEMENT

Transcription

1 SOCIAL MEDIA FOR WEALTH MANAGEMENT Benchmarking Best Practices - Strategy DECEMBER 2012 MYPRIVATEBANKING REPORT 2nd Edition: Completely Revised and Enlarged Extract Full report has 160 pages plus comprehensive data appendix

2 CONTENTS 1.0 OVERVIEW RANKING TABLE EXECUTIVE SUMMARY THE NETWORKED PRIVATE BANKER SNOWBALLING GROWTH OF INTERACTIVE COMMUNICATION IN REAL TIME ARE PRIVATE-BANKING-CLIENTS ACTIVE USERS OF SOCIAL NETWORKS? CASE EXAMPLES 13 Marks & Spencer: Social media feedback becomes essential to a traditional retailer 14 Hotel Chocolat: social media underpins the growth of a new retail brand 15 The IAEA: crisis shows the value of social media 16 Starbucks: now 4th most liked Facebook company presence but still excel at managing social media CONSEQUENCES OF SOCIAL MEDIA FOR WEALTH MANAGERS ELEMENTS OF A SOCIAL MEDIA STRATEGY FOR WEALTH MANAGERS METHODOLOGY SELECTION OF BANKS AND WEALTH MANAGERS EVALUATION PROCEDURE DETERMINING THE CRITERIA 26 Facebook presence (max.11 points) 26 Twitter Stream (max.7 points) 27 LinkedIn Profile (max. 5 points) 27 YouTube Channel (max.10 points) 28 Use of social media on own website (max.11 points) 28 Social Media Strategy (max. 4 points) 29 Best Practice (max. 2 points) NINE CAUSES FOR FEARING SOCIAL MEDIA AND WHY THEY SHOULD BE IGNORED 31 02

3 MYPRIVATEBANKING RESEARCH 6.0 SUMMARY: FACEBOOK AND LINKEDIN POOR, TWITTER AND VIDEO ACCEPTABLE SOCIAL MEDIA ACTIVITIES: ONLY FEW BANKS HAVE STRATEGY IN PLACE FACEBOOK: ONLY TOP-PERFORMERS UNDERSTAND IMPORTANCE TWITTER: LACK OF RELEVANT CONTENT LINKEDIN: A PLATFORM STILL UNDERESTIMATED VIDEO: STRONG PERFORMANCE OVERALL WEBSITE SOCIAL MEDIA: LACK OF UP-TO-DATE CONTENT OVERALL SOCIAL MEDIA STRATEGY AND BEST PRACTICE: DISAPPOINTING RESULTS WITH FEW EXCEPTIONS PROFILES ABN AMRO BANCO ITAÚ BARCLAYS BNP PARIBAS BNY MELLON BRADESCO CHARLES SCHWAB CITIGROUP COUTTS CRÉDIT AGRICOLE CREDIT SUISSE DBS BANK DEUTSCHE BANK FIDELITY GOLDMAN SACHS HSBC PRIVATE BANKING ING INVESTEC JULIUS BAER MERRILL LYNCH

4 7.21 MORGAN STANLEY NORTHERN TRUST PICTET ROYAL BANK OF CANADA SOCIETE GENERALE STANDARD CHARTERED SUNTRUST UBS U.S. TRUST WELLS FARGO SOCIAL MEDIA BEST PRACTICE PROVISION OF SPECIFIC CHANNELS CATERING TO WEALTH MANAGEMENT CLIENTS XXX Bank* PROMOTING SOCIAL MEDIA ON THE WEBSITES XXX Bank FACEBOOK 140 Multiple language presences XXX Bank 140 Customer service XXX Bank 141 Interaction on Facebook XXX Bank DIALOGS ON TWITTER XXX Bank LINKEDIN 144 Providing regular updates on LinkedIn XXX Bank 144 XXX Bank on LinkedIn 145 Making use of LinkedIn s potential XXX Bank 146 Promoting products and services on LinkedIn XXX Bank INNOVATIVE WAY OF CLIENT ENGAGEMENT XXX Bank PRIX PICTET: A GLOBAL AWARD IN PHOTOGRAPHY AND SUSTAINABILITY XXX Bank ONLINE MAGAZINE WITH ADDITIONAL VIDEO CONTENT XXX Bank EXPERT INSIGHTS IN A BLOG XXX Bank PLATFORM FOR CO-DEVELOPMENT AND INNOVATION - XXX Bank INTERACTIVE KNOWLEDGE PLATFORM - XXX Bank

5 MYPRIVATEBANKING RESEARCH 8.12 WEALTH MANAGEMENT INSIGHTS CENTER XXX Bank DEDICATED BLOG FOR WEALTHY CLIENTS XXX Bank WOMEN&CO TARGETED MARKETING ACTIVITIES - XXX Bank USING SOCIAL MEDIA FOR PROMOTING CSR ACTIVITIES XXX Bank PRIVATE NETWORK FOR PRIVATE BANKING CLIENTS XXX Bank DISCLAIMER 159 *All banks with full name in report 05

6 1.0 OVERVIEW RANKING TABLE Rank Bank Total Points 1 Charles Schwab 42 Facebook Twitter Linked In You- Tube Website Social Media Overall Social Media Strategy Best Practice Rank Deutsche Bank 41 3 Coutts 38 4 Citigroup 37 4 Societe Generale 37 6 Barclays 36 6 Crédit Agricole 36 8 Fidelity 34 8 Pictet Investec Wells Fargo n.r n.r n.r n.r n.r n.r. 06

7 MYPRIVATEBANKING RESEARCH 2.0 EXECUTIVE SUMMARY Social media is taking a long time to become fully established in much of the world of wealth management. Despite the startling rise of social media to its current pivotal position across the globe, so far the majority of leading private banks and wealth managers have failed to act to exploit the full potential of social media. In this detailed analysis of the deployment of social media by the 30 leading providers of private banking and wealth management services, measured by private client assets under management, the overall picture that emerges is one of missed social media opportunities and, for the most part, an absence of effective social media strategies. But compared to the first edition of this report in 2010, the average score awarded has doubled from 13 to 27 points (maximum 50 points). This result shows that the wealth managers are still reaching only half of their potential, which suggests that global wealth managers are on the right track but far from perfect. Only the frontrunners among the wealth managers surveyed in this report have come anywhere close to utilizing the full potential social media networks, such as Facebook and Twitter, offer as means of reaching out to their affluent users. The three leading contenders that emerge from our benchmarking analysis, Charles Schwab, Deutsche Bank and Coutts, have all developed strong and effective social media strategies. Charles Schwab excels with a truly interactive, lively Facebook page. Deutsche Bank shows its strength with a bilingual YouTube channel that contains a broad variety of videos about a whole range of the bank's activities. Coutts has taken a lead with the social media on its own website, including a private virtual community for its own high net worth clients. Among the larger banks with private banking divisions, with a few exceptions, such as Barclays and Societe Generale, our analysis showed that while many banks have greatly improved their social media aimed at retail customers, that targeted specifically at wealthy clients is trailing a long way behind. Many of these larger banks have plenty of content that their wealthy clients may find interesting and relevant but they are providing relatively few dedicated presences for this segment of their customer-base. Among private banks specializing in wealth management, there is often an even greater distrust of social media. So far, many of them have chosen to avoid any presence on social media at all. Others remain extremely cautious, only exploring these new channels in a very limited way by, for instance, just being active on Twitter or LinkedIn. In terms of the major social media channels, analysis showed that private banks were particularly poor in turning the potential of Facebook and LinkedIn to good effect. For both channels, the proportion of banks with dedicated wealth management presences was less than 50% of those surveyed. In the case of Facebook, despite the existence of a few excellent wealth management presences, many private banks have yet to be convinced that it is an appropriate medium for reaching wealthy clients. Meanwhile, with scores for content on LinkedIn only averaging 39%, many private banks seem to view LinkedIn exclusively in terms of their role and reputation as employers rather than recognizing the scope this channel has for promoting banking services and products. 07

8 The general picture was brighter when it comes to private bank's use of Twitter and YouTube. In the case of Twitter, relevant streams for private banking clients were provided by just over two thirds of the banks surveyed although the scores for content were less encouraging. Out of the 30 banks analyzed, 26 do not have relevant Twitter streams in more than one language. Only in relation to YouTube and video on bank websites did a majority of the private banks and wealth managers covered in this report meet most of the evaluation criteria applied in respect of this medium; average scores for criteria in this section ranged from 73% to 88%. The use of social media on the banks' own websites showed a mixed picture with a significant proportion of website content lacking functionality for commenting, rating or feedback that are needed in order to count as social media content in the first place. For the content that qualified as social media, scores for rating, commenting and feedback averaged 70% of the maximum possible. Many banks are also plainly struggling to keep their social media content up-to-date with average scores of just 47%. The report's findings in relation to the analysis of private banks and wealth managers' social media strategies are the most worrying of all. At present, only a minority of just 20% of the banks have effective strategies for targeting social media at wealthy clients in place and a significant number of them seem to have no social media strategy for this segment at all. We strongly advise wealth managers to take social media more seriously. Social media like Facebook (more than one billion active visitors in any one month) and Twitter (more than 100 million users in a month, of whom 50% visit each day) are increasingly used by an older and more affluent audience: 38% of internet users aged 65 and over in the United States use social media today and for the 50 to 64-year olds the proportion has now reached 57%. These are telling numbers and should be a wakeup call for any marketing executive in the financial sector. The interactive stage in the development of the Internet shows every sign that it is going to be a dominant characteristic of cultural, commercial and public life for a long time to come. Wealth managers and private banks urgently need to develop strategies that place responding to this global trend at the center of their policy-making. As first steps we recommend three important measures every bank and wealth manager has to take today: Leaders in every bank have to open up to social media: (details see full report) Wealth managers must have a presence in all relevant social media: (details see full report) Keep the social media presence active and lively: (details see full report) In the following chapters we will detail the strategic and operational measures wealth managers should undertake, together with examples from outside the banking industry, we'll probe their apparent lack of enthusiasm and analyze in depth the social media activities of the leading banks and provide best practices to illustrate what has to be done to reach the affluent in this new era of marketing and communication. 08

9 MYPRIVATEBANKING RESEARCH LIST OF ALL ANALYZED BANKS: ABN AMRO BANCO ITAÚ BARCLAYS BNP PARIBAS BNY MELLON BRADESCO CHARLES SCHWAB CITIGROUP COUTTS CRÉDIT AGRICOLE CREDIT SUISSE DBS BANK DEUTSCHE BANK FIDELITY GOLDMAN SACHS HSBC ING INVESTEC JULIUS BAER MERRILL LYNCH MORGAN STANLEY NORTHERN TRUST PICTET ROYAL BANK OF CANADA SOCIETE GENERALE STANDARD CHARTERED SUNTRUST UBS U.S. TRUST WELLS FARGO 09

10 3.0 THE NETWORKED PRIVATE BANKER (details of this chapter see full report) 10

11 MYPRIVATEBANKING RESEARCH 4.0 METHODOLOGY 4.1 SELECTION OF BANKS AND WEALTH MANAGERS This study analyzes the social media activities of 30 leading global private banks/wealth managers. The 30 providers that were analyzed are the biggest wealth managers for private clients worldwide, provided that they met a certain minimum standard of social media implementation, ranked by private banking assets under management. This report focuses overwhelmingly on evaluating the public facing social media activities of the banks and wealth managers. With one exception, no password-protected or internal social media were included in the evaluation. In the case of private networks our criterion related only to the presence of such a client network or platform. The rest of the analysis is restricted to the banks presences on the social networks Facebook, Twitter, LinkedIn and YouTube plus their use of social media tools and functions such as blogs, podcasts or social bookmarking. As most of the banks and wealth managers are large financial conglomerates with multiple business activities serving different client segments, together with many local business activities in numerous countries, we used the following criteria for choosing relevant social media activities: Social media activities by the wealth management or private banking unit of a bank either in its home market or such activities in English and targeted at an international community of wealth management clients. With regard to bank/wealth manager websites, social media activities targeted at retail clients or the general public with useful content for (potential or existing) wealth management clients. We also looked specifically at the websites of the banking groups. With regard to major external social media platforms, presences of banking groups targeted at retail clients, the general public or specific groups such as job hunters (notably in the case of LinkedIn) or investment professionals. But we counted them only insofar as they have content relevant for private wealth clients or high net worth individuals. Not included in our analysis were social media activities of other units of the banks that have little or no relevance to private wealth management in terms of content, or social media activities strictly limited to local foreign markets. The starting point of the analysis of the social media activities for the selected banks was their global website, where there was one, and the website intended for potential private banking clients in the home market. The home market here was deemed to be the country in which the bank has its corporate headquarters. The home market websites are the website of the banking group plus, where it exists, the website of a Wealth Management subsidiary. In cases where the home market is multilingual, such as Switzerland, the websites were studied in the language version of the majority of the population. MyPrivateBankingResearch s approach is based on qualitative, in-depth interviews with private banking clients, which has led us to identify six core types of use in private client social media activity. 11

12 In this study, the different uses are typical scenarios of how and why certain user groups use social media specifically with respect to managing their wealth. We have derived our detailed evaluation criteria and their weight directly from these use categories: Social Media Use Categories User Group Objective Paving the way for a client relationship Using social media for support Connecting with representatives of the bank Potential new clients Existing clients Existing clients Creating an overview of the brand, services, products and trustworthiness of a bank by scanning the feedback and opinions others have given or are able to give in real-time in various social networks Posting questions/complaints about one s banking relationship with the intention of getting a response and resolution from a bank representative Establishing a personal relationship with one s local advisor via social media Giving feedback on various aspects of a bank relationship Existing clients Expressing positive or negative feelings, encounters, and stories that clients experienced with a company or an employee through feedback mechanisms on the website and in various external social media 12

13 MYPRIVATEBANKING RESEARCH Social Media Use Categories (cont.) User Group (cont.) Objective (cont.) Discussions regarding the general perception of a bank in society, its political and social environment Getting the latest news, rumors and updates about a bank or its representatives Potential new clients, existing clients, general public, journalists, job applicants, suppliers Potential new clients, existing clients, general public, journalists, job applicants, suppliers Expressing positive or negative views about a corporation, for instance with regard to charity activities, broader role in society etc. on various social media platforms Receiving real-time feeds of information about an institution and its employees for instance through Twitter or blogs 13

14 4.2 EVALUATION PROCEDURE The social media activities of the banks were analyzed by two analysts, independently of each other and the analysis and evaluation was repeated after an interval of six to eight weeks. This was done to minimize the probability of misleading evaluations due to a purely subjective point of view or accidental website or Internet problems at a certain point in time. Also, given the quantity of information that needed to be analyzed, the possibility of not finding all the relevant information for individual members of the target group could not be ruled out. Double checking through having two evaluators working independently removed this danger. All findings were collected during the months of September and October 2012 and represent the status of websites and social media presences during this period only. Although social media presences are so popular in the world at large, most banks still don t have a specific presence for their wealth management unit in most of the social media reviewed. Therefore, we decided to include the social media presence of the global banking groups and of the banking units in their home market if ( and only if ) a significant proportion of the content was relevant to wealth management clients. For instance, if a bank has only one, general Twitter stream but the tweets were about market developments or investment advice, we included this social media presence in our evaluation. The evaluation was done on the basis of 31 different criteria that were divided among six categories. Care was taken to keep the definition and allocation of points as free as possible from subjective influences, thus ensuring a high level of objectivity in the benchmarking process. 14

15 MYPRIVATEBANKING RESEARCH 4.3 DETERMINING THE CRITERIA In this study, the overall criterion for evaluating the social media is the extent to which they fulfill the use categories described above, from the point of view of various users. From this the following individual criteria were developed: quality of information, possibility for feedback, communication of responses to feedback, maintenance of news streams, user-friendliness and entertainment. Overall, a score of 50 points was the maximum. The banks surveyed could score points in the following areas: Facebook presence (max. 11 points) Twitter stream (max. 7 points) LinkedIn profile (max. 5 points) YouTube channel and videos on own website (max. 10 points) Use of social media on own website (max. 11 points) Social media strategy (max. 4 points) Bonus points for best practice (max. 2 points) TOTAL: maximum 50 points Facebook presence (max.11 points) Facebook, with a membership of more than one billion worldwide, is without doubt the most important social network globally. For this reason, although we have reduced Facebook s weighting in the scoring compared to the last edition of this report, it is still the social media platform that receives the highest allocation of points in this evaluation, equal to the allocation for social media on the banks own websites. Facebook functions also as a hub for the integration of various other social networks like Twitter, YouTube and others. It is possible, for example, to show the Twitter stream on Facebook (under a separate tab or on the Facebook page, depending on the application used). In essence, Facebook is not only the most important social network the place to be - but also a potential integration hub for other social media: (details see full report) Twitter Stream (max.7 points) Twitter is the global leader as a micro blogging service. Especially for transmitting news, quick commentary or other updates, Twitter has become an indispensable medium with the attribution of news stories to tweets now almost a daily occurrence. After Facebook, Twitter is today's most influential social network medium. (details see full report) LinkedIn Profile (max. 5 points) LinkedIn is the leading network for business professionals worldwide. More than 187 million members in over 200 countries are part of LinkedIn. Although LinkedIn is seen primarily as being of interest to company staff, alumni and job hunters, LinkedIn presences can be an important 15

16 source of information to wealthy clients and potential clients. It is important for a bank or wealth manager to show an active profile in this social network and we have slightly increased the weighting for this platform in the current report: (details see full report) YouTube Channel (max.10 points) Broadcast yourself was the motto of YouTube. Being the biggest social video network worldwide, every bank or wealth manager should broadcast itself via YouTube to profit from the network effects of this platform. The importance of video content as a medium because of its near universal appeal has come about only over the last few years. In many ways, video content, in contrast to written content, is still under-used by many conservative corporations such as banks or wealth managers, especially when it comes to disseminating their expert analysis and comment. Yet, it is important to package the content in an entertaining and engaging format. For this report, video content has a higher weighting than before and the value of adding video content to bank websites as well as their YouTube channels has been recognized. (details see full report) Use of social media on own website (max.11 points) MyPrivateBanking has recently published a full report on the use of websites to gain new private banking clients. A bank s website is still identified as the main information hub as far as many (potential) clients are concerned; all the more important that social media should be used on the website through blogs, podcasts or other functions as well as linking to and integrating with social media outside of the website. Both major aspects are covered in the scoring of the current evaluation: (details see full report) Social Media Strategy (max. 4 points) Merely following a fashion or imitating competitors will not enable a private bank or wealth manager to reap the full benefits of social media. To take full advantage, a bank needs to be willing to engage with clients and potential clients in new ways and to be prepared in a practical sense by developing sources of interesting content and being ready to interact with clients and visitors: these factors are reflected in the points available in the previous sections of the evaluation. However, banks should also have a robust strategy in place, and in this section points are awarded for convincing proof that a bank is rolling out such a coherent social media strategy. Firstly, we have been looking for evidence that social media provision has been thought through and, secondly, for any demonstrations of social media policy being taken to the level of allowing individual bank representatives their own personal - but bank branded - social media presences. (details see full report) 16

17 MYPRIVATEBANKING RESEARCH Best Practice (max. 2 points) Under the chapter Best Practice we feature those banks that have distinguished themselves by developing a social media presence on one of the networks, or a social media facility on their own website, or a particular feature of either, that stands out among all the analyzed banks. For a best practice 1 additional point is awarded up to a maximum of 2 points. 17

18 5.0 NINE CAUSES FOR FEARING SOCIAL MEDIA AND WHY THEY SHOULD BE IGNORED (details of this chapter, see full report) 18

19 MYPRIVATEBANKING RESEARCH 6.0 SUMMARY: FACEBOOK AND LINKEDIN POOR, TWITTER AND VIDEO ACCEPTABLE (details of this chapter see full report) 19

20 7.0 PROFILES (details of this chapter see full report) 20

21 MYPRIVATEBANKING RESEARCH 8.0 SOCIAL MEDIA BEST PRACTICE (details of this chapter see full report) 21

22 9.0 DISCLAIMER No Investment Advice This report is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. This report is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. It does not constitute a general or personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors. The price and value of securities referred to in this report will fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of all of the original capital invested in a security discussed in this report may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Disclaimers There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth in this report. MyPrivateBanking GmbH will not be liable to you or anyone else for any loss or injury resulting directly or indirectly from the use of the information contained in this report, caused in whole or in part by its negligence in compiling, interpreting, reporting or delivering the content in this report. Copyright MyPrivateBanking GmbH s Products are the property of MyPrivateBanking GmbH, Switzerland, and are protected by Swiss and international copyright law and other intellectual property laws. Customers are prohibited to copy, forward or store MyPrivateBanking Products outside of the legal entity that has made the purchase. MyPrivateBanking GmbH All rights reserved. 22