Putting a Face to Your Facebook Efforts: Social Media’s Impact on Today’s Financial Decision Behavior
Social media is a staple of everyday life, and most financial institutions are spending time, money and effort to build their profile on social media. In that light, Raddon explores the influence of social media on consumers’ financial decision process in our recent study, Payments Insights: Rise of the Digital Pioneers.
The typical consumer has been well aware for some time now to not believe everything they read or hear on the internet. The recent news about Facebook’s role in the 2016 election have only confirmed that suspicion. Yet for many, Facebook and other social media remain a primary destination on the internet and an enormous source of information for consumers.
With so many potential customers consuming so much information from so many sources, what sort of influence does social media marketing have for a financial institution? Maybe more than the doubters think. Raddon’s research finds that overall, 30% of consumers say that information or advice they found on social media has influenced them to purchase a type of product or service. When it comes to making a financial product or service purchase decision, the odds increase, influencing almost 4 out of 10 of us.
Consumers are most likely to gather financial product information from a social network site (e.g. Facebook), followed by a blog, but as a whole they remain cautious to the accuracy of the information they’re getting. When asked how confident they are in the information they received, fewer than a quarter (23%) of consumers are very confident/confident.
There’s even more caution when clicking on financial advertisements. Thirty-four percent of the time, consumers will click on a product or service advertisement, but if a financial institution is advertising a product or service, the percentage of clickers drops down to 15%.
Among these behaviors, we see consistent trends that transcend throughout the financial industry. Younger national consumers (think Millennials) are more likely to gather financial information from social media, they have higher confidence levels in the information they’re obtaining online, and they show a higher likelihood to click on advertisements from a financial institution, compared to older generations. Much of this could simply be due to their comfort and familiarity with technology. Or perhaps, it could be due to the generation’s openness and appetite for education when they’re faced with financial decisions.
When Raddon asked respondents if they had seen a bank or credit union advertisement or web page online through social media or blogs, 23% said they have. However that number jumps to 31% when asked if they’ve see an advertisement of any of the institutions they currently use or do business with (which may have been how they began business with the institution in the first place). Of all financial institution types, major banks tend to have a perceived larger presence online, 36% consumers who do business with a major bank know they have a presence on a social networking site, followed closely by multi-state banks.
Interestingly, consumers who are aware of their institution’s online presence, and/or who have clicked on online promos or ads are not deterred from the financial institution’s branch. In fact, they show higher usage levels not only in the lobby/drive-up, but also higher ATM usage, debit card usage, as well as mobile and online banking. Arguably, a consumer who is aware of their institution’s online presence and promotions, shows higher levels of engagement and activity.
Here’s the problem though. While an online presence via social networking sites is certainly important for any financial institution, only 12% of consumers have ever visited their financial institution’s networking site. Even among the more online Millennials, only 18% have visited their FI’s social media site.
Utilizing social media and blogs is a very natural way today to establish a relevant brand, educate, and provide outreach for consumers, but that channel still only reaches a fraction of an institution’s customer base. And with changes coming to Facebook to limit visibility from businesses and media, social networking may become less important to your strategy moving forward.
Consumers say they are influenced by financial information they’ve obtained online, but if the delivery of financial information is in the shape of an advertisement or feels like a sell, the consumer is more likely to put their guard up. Consumers show higher levels of awareness if their financial institutions have ads or web pages on social networking sites, but overall, utilization levels or visits/clicks trend low, and may not rise as quickly as we would hope.