Investment in social media marketing by financial services companies has declined sharply since the end of 2011. While in the last quarter of 2011, 22 percent of companies in the financial services sector were investing in social media, this fell to 8.5 percent in the first quarter of this year and six percent in the second quarter.
This represents an interesting about-turn. We saw financial sector investment in social media increase steadily over the past few years to reach the highest levels ever by the end of 2011. The sector noticed that social media was changing the way consumers interact with businesses and, as a result, companies were noticeably using social media both as a customer service channel and as a recruitment tool.
However, the financial world soon realised that social media also presented risks. Not only because financial information must comply with strict rules and regulations but, as financial services brands embraced new methods for communicating with customers, they also opened themselves up to criticism and negative sentiment.
