Social Media in Finance 2018 // ASK AN EXPERT smif18.co.

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SOCIAL MEDIA IN FINANCE

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Coming this June, in Blackfriars, London, the UK’s first ever social media in financial services event.

In this article, conference organiser James Saward-Anderson speaks with three leading figures
involved in the ongoing integration of social media interaction into the financial services sector.

Keith Lewis, Head of Social Media at Zurich UK, describes his company’s multi-faceted approach to
social media. Zurich uses social platforms to:

build relationships with customers,

engage with intermediaries,

strengthen their recruitment brand, and

to encourage communication between colleagues at different levels of seniority, essentially internal

promotion of the brand and its values.

Vladimir Berezansky, a financial regulatory compliance consultant formerly affiliated with EY, is
“patiently optimistic” about the future value of social media in the financial services and investment
sectors. Vladimir believes that social media is on a journey from where it is now – an international,
multi-layered public square where privacy is not respected – to a future where users will be more
accountable for their behaviour.

Tom Crump of Mint Analysis believes, in common with almost everyone else in the investment
community, that MiFiD2 is “arguably the biggest change in legislation for the financial services sector
in years, possibly history”. Tom spoke with us about:

the complexities of recording social media messaging between investor and investment house in MiFiD2
compliance bundles,

“substantive research” and analyst commentary on social media, and

the role of social media signally as part of the investment process and how that fits in with MiFiD2.
Social Media in Finance 2018 // ASK AN EXPERT smif18.co.uk

First, Keith Lucas shares Zurich Insurance’s approach to social

media engagement with us.

Overcoming the struggle to

engage with customers online
“For the first 6 years of my career at Zurich, I told
people never to speak to the media – they must al-
ways direct enquiries straight to the press office.
That’s exactly the type of policy you’d expect from a
146-year old financial institution in the highly-regu-
lated world of insurance,” explained Keith.
“Then, the rise of Twitter changed everything. The
way that companies were expected to interact was
changing year by year. Nothing was going to be the
same after 2008. The problem was that, for all the
reasons they had been told before, a lot colleagues
still lived in a pre-Twitter world mindset.”
“Dial back 40 to 50 years and there was rapidly
increasing penetration of telephones in the home.
Customers made the choice that this is the way
they wanted to interact with companies and or-
ganisations and, as a result we changed our busi-
ness practices as a result because people wanted
answers straight away. They didn’t want to write a
letter, send it off, and wait a week or two for a reply.
“Zurich’s management and I feel that the effect of
the growth of social media on society and on how
business is done will be even more profound that
the introduction of the landline telephone”.

Zurich Insurance, like many long-established fi-

nancial institutions, always had their way of do-
ing things and this wasn’t just confined to their
relationship with the press.

Although occasionally modified to meet evolving

compliance regulations, that way of doing things
governed how they interacted with their own
employees, with customers, and with intermedi-
aries.

“We noted how consumers inside and outside the

financial sector were changing the way they con-
nected with businesses they transacted with. It
soon became apparent to Zurich that this was the
beginning of a once-in-a-generation shift of the
communication channels we used as a society.”
Social Media in Finance 2018 // ASK AN EXPERT smif18.co.uk

For Keith, the next step was deciding which parts of the Zurich
business should, or could, add social media to their other more
standard methods of communication.

Zurich UK’s social media strategy–

streamlining and integration
In line with many organisations, Zurich has also been through a process of simplification within the
business, with the customer in mind.

At one point, their website listed 200 different ways for a consumer, a business customer, intermedi-
ary, supplier, and so on to get in touch with the business. According to Keith, “the number of contact
points is now down to 50, including social media channels, and the rationalisation process is still very much
ongoing. Becoming fully operational in a social world was now a business priority.”

Not only for compliance purposes but for privacy reasons, marketing and claims handling do not take
place on social media and are unlikely to for the next few years at least. However, a lot of Zurich’s ac-
tivities are now carried out online.

Zurich UK’s social media strategy–

connecting with businesses and
intermediaries
“Zurich saw growth opportunities with B2B social media in the first instance.”

“We have a very healthy and active intermediary and broker network. We saw Twitter and LinkedIn as a way
to raise our brand profile among this vital demographic for the company. If one of our staff were speaking
at a conference or we were attending an exhibition, we could simultaneously promote our brand, promote
our expertise, and promote future engagement at the conference event itself.”

“For our own sales teams, connecting with clients on LinkedIn keeps Zurich as a brand in front of them more
regularly, all the time increasing their familiarity with and recognition of the company and the individual
rep they had built a relationship up with. All this in a world which has far less time for traditional face-to-
face meeting than it used to”, Keith told me.
Social Media in Finance 2018 // ASK AN EXPERT smif18.co.uk

Zurich UK’s social media strategy–

making the company feel smaller and
more personal
Keith encouraged the C-Suite and the extended executive level (totalling around 120 staff) to become
more socially internal. Big companies have a habit of fracturing down departmental and geographical
lines and communicating a shared strategy directly from the board and senior management level to
every employee in the company would make those working for Zurich feel more visible to the compa-
ny’s leaders.

“We use Yammer as our internal social channel and it gives colleagues a chance to tell the wider Zurich story
to every member of our company. We’re seeing growing engagement across all areas of the business with
this approach. There are other internal social networks out there such as Facebook for Work”, explained
Keith.

Zurich UK’s social media strategy–

brand leadership in HR
In the area of HR, Keith set out Zurich’s approach. “We’re a strong UK-based company operating as part
of a worldwide platform. We have 18 offices in the UK. We’re leaders on wellbeing and mental health in
the workplace. £65 million has been given away to good causes by our Zurich Company Trust in the last 5
years. Zurich has a great story to tell future employees and the company sees social media and the internet
in general as the place to tell this story in the way we want it to be told”.
Social Media in Finance 2018 // ASK AN EXPERT smif18.co.uk

Zurich UK’s social media strategy–

getting the right type of staff
involvement
The company is actively looking at other ways to amplify its brand online. It sees social media as a way
to listen to what their customers are telling them in a more direct way than before. Zurich is seeing
more and more engagement on Facebook and Twitter with clients wanting to change address details,
change pension plans, and change their levels of coverage. Interesting, Barclays Bank have now begun
offering connection via Facebook as an alternative to traditional phone-based customer service as well.

We asked Keith what the main challenges of introducing social media into Zurich had been so far.

“As with all long-established multi-national institutions, the

culture needs to be encouraged to change and we need our
employees to be actively involved in. Although we can’t sell
insurance via social media, we can be the best company we
can be in every other aspect when dealing with a member of
the public, a business customer, or an intermediary.”

“We have 4,500 employees in the UK and the numbers engaging on social media are growing, both inter-
nally and externally. They’re sharing job spots that are available or a piece of content that we know will be
of interest to certain sections of the people we’re connected to online. That builds the brand not only of the
company but our individual staff member as a voice to be trusted.”

We then asked about how Zurich encourages staff to draw the line between professional and personal
engagement. The answer was that there should be no distinction between the personal you and the
professional you if you are certain on what your social media account is there to do. One social media
account can be shared between the people in your life and the people you serve with or look after at
work.

According to Keith, this is “the real you”, “the whole you”, you are a person behind your job title and
people buy from people they like first. Just don’t write anything you’d be ashamed to show to your
grandmother and if there is already stuff on there you wouldn’t show her, delete it because it will fol-
low you around like a bad smell. Just ask Phil Neville.”
Social Media in Finance 2018 // ASK AN EXPERT
Key red flags for compliance in
social media use for financial service
We spoke next with Vladimir Berezansky, a finan-
cial regulatory compliance consultant formerly
affiliated with EY, in a fascinating and wide-rang-
ing interview. Vladimir’s opinions cover not just
the role that social media could have in the finan-
cial sector but its effects on society as a whole.
“It’s probably better that financial services compa-
nies are really only starting to concentrate now on
social media,” according to Vladimir.
“Social media networks have been disruptive of all
traditional hierarchies everywhere – in business,
governmental, and even personal spheres. For a
while, and to a lesser extent even today, everything
became the property of the crowd – your propri-
etary information, your fiduciary information, your
intellectual property, even your private life. Anyone
could post it personal, confidential information on-
line anonymously and everyone else could access it
without consequence.”
“Look at the Panama Papers and Paradise Papers –
they were people’s personal and financial informa-
tion that, because someone had a moral objection,
they became public property. Self-appointed ethical
warriors decide what gets distributed to the public
and to whom; and no government, business, or le-
gal system could put up a defence against it. It was
everyone’s business, not the business of the individ-
ual, their families, their accountants, and HMRC.”
“In this marketplace, in this environment, following
on from financial scandal to financial scandal, why
would anyone want to get involved? You might ask”,
Vladimir commented.
smif18.co.uk
Vladimir feels that, following this period when
everyone’s privacy rights belonged to the crowd,
the pendulum is slowly starting to swing back to-
wards the protection of privacy.
“Social media has had the feeling of an internation-
al, multi-layered public square where people and
organisations are condemned as guilty by a very
narrow section of public opinion, but in a moral and
legal sense, the walls are coming up again and a
new more acceptable equilibrium is on its way.”
Vladimir praised the approach of companies like
Zurich, Barclays, and Santander to the social me-
dia while conducting his own research for our in-
terview.
“I am patiently optimistic. I see value in engaging
social media but in a very limited sense until order is
restored and the rights of others, even of those who
might object on moralistic or some other grounds,
are respected and protected effectively by law.”
“These are new methods of interacting with cus-
tomers – new ways to engage in a way they might
feel comfortable with even be enthusiastic about. A
brand’s reputation can be greatly enhanced by how
quickly it responds to questions on Twitter – in and
of itself, the gesture is not great or requiring a mas-
sive investment from the company but it means a
lot to the people making the enquiry. That can only
be good.”
“However, be careful when it comes to giving those
in charge of your sales, marketing, data protection,
and especially confidential company information
their own social media channels. At the moment,
while openness and transparency are fine, many op-
portunities also exist to damage your brand.”
Social Media in Finance 2018 // ASK AN EXPERT smif18.co.uk

MiFiD2 and social media

Next, for a different view on social media and the
financial sector, we interviewed Tom Crump at
Mint Analysis. We wanted his opinions on where
social media was more pain than gain for invest-
ment bankers, especially in the light of MiFiD2, a
development which Tom describes as
Arguably the biggest
change in legislation
for the financial services
sector in years,
possibly history
MiFiD2 introduces the concept of best execu-
tion to the financial sector. Account price, costs,
speed, likelihood of execution and settlement,
size, nature or any other consideration relevant
to execution must now be considered and then
properly recorded for all transactions. Firms must
show that they have taken “all sufficient steps to
obtain . . . the best possible result for their clients.”
Under MiFiD2, research unbundling rules state
that all substantive research that is consumed
must be paid for by the asset manager. What con-
stitutes “substantive research”?
“Social Media content usage further complicates
the matter. While most social media public content
would be classified under the minor non-monetary
exemption, private content from an analyst de-
livered via private social media channels could be
deemed substantive. The nature of social media and
the distinction between public and private content
makes this landscape very sensitive to navigate.”
“What if an asset manager obtains intelligence
from a social media platform or actions stock-spe-
cific commentary online, how can it be captured
and stored securely, whether from private messag-
es, tweets, posts or comments, is it paid for as sub-
stantive research, and how will this be policed?”
“The storage component brings with it additional
considerations such as significant technology spend
and internal compliance risks to make the informa-
tion available only to those with necessary permis-
sions.”

According to Tom, the business case for social

Under MiFiD2, all communications intended to or
media interaction “is more complex within MiFiD2.
result in a trade must be stored (Article 16 states
Social media already plays a role in investment bank-
that all data related to a transaction must be stored
ing and the platforms are already intertwined with
for at 7 years). Institutions will need very secure
MiFiD2 electronic communications governance. The
mechanisms in place to avoid breaches of both
question is not whether investment bankers should
MiFiD2 and GDPR.
engage with social media – they should and do – but
how can they continue to balance the opportunity
with increasing compliance requirements.”

“For firms using social media to make investment

decisions, whether it be content, sentiment or as a
private messaging channel, they must have appro-
priate measures in place to meet regulatory require-
ments and mitigate risk.”
Social Media in Finance 2018 // ASK AN EXPERT
Data and opinion comes in on social media all the
time. Financial institutions need to store every
bit of information that led to an investment deci-
sion or a transaction. If social media and internet
commentary influences opinion, how are specific
posts and Tweets stored? What if a tweet appears
whose information forms part of a decision to in-
vest is later deleted before the investment bank
has had chance to screenshot it to store with the
information bundle?
What about subject access rights? Under MiFiD2,
the regulator will have the right to see the infor-
mation held about the reason behind a transac-
tion. Will either MiFiD2 or GDPR (or perhaps both)
allow subject access rights so that if a trade has
gone badly wrong for an investor, they will not
only be able to see the information stored about
them personally as a client but also the informa-
tion bundle behind a trade?
“There could be other unforeseen consequences re-
lating to disclosure of trading and communication
information. Twitter and social media signalling is
increasing in popularity among investment firms
even though its usage is still small in comparison to
other research and stock entry/exit point methods.
There is evidence that measuring market sentiment
via social media can produce higher profits than
traditional strategies although, of course, that ev-
idence is disputed.
“The question on how this type of sentiment data is
stored becomes even more complex.”
“These are all very complex issues and the nearness
in timing of the introduction of MiFiD2 and GDPR
was unfortunate as the industry did not have time to
prepare for and bed in what was needed for one new
law before the other came in a few months later.”
smif18.co.uk
On the other hand, MiFiD2 concerns aside, Tom
sees value in engaging on social media for invest-
ment banks.
“It’s a great place to think about the end investor.
Social media is forcing many companies and their
CEOs to engage with their customers, speak out
about company values, Corporate Social Respon-
sibility, and the importance of transparency in the
investment process, one of MiFiD II’s primary ob-
jectives. This not only applies to the financial and
investment communities but across business as
a whole – investment banks and asset managers
should be no exception.
For investment banks in particularly, social media
can be used to voice their own brands and invest-
ment beliefs to engage with and win business from
asset managers. Social media is an exceptionally
low-cost model to target clients and instantly en-
gage with decision makers, I have no doubt that it
will accelerate in usage over the coming years with-
in Investment Banking. The big challenge is ensur-
ing all employees are educated on the risks involved
and compliant with sensitive information disclo-
sure.”
“Companies must be careful”, warns Tom. “Whatev-
er is posted online – whether it is a personal view or
a professional view - will be increasingly scrutinised
by regulators, and if it’s scrutinised by regulators,
it should be appropriately controlled and mitigat-
ed by firms. Banks and Asset Managers must take
extra precautions to ensure they are not associated
with non-compliance or risky content online given
the speed and impact that Social content can dam-
age businesses and reputations. All personnel must
be careful about what they share with the public,
new staff must be comprehensively screened and
educated, and firms should have in place a robust
policy on social media/online engagement.”
Social Media in Finance 2018 // ASK AN EXPERT smif18.co.uk

The payback using social media

Back to Keith Lewis at Zurich.

Zurich has led the way in the eyes of many in so-
cial media for financial services engagement. I GDPR could
asked Keith what the most persuasive arguments
he could give me for the adoption social media
by the financial sector.
mean that
“Try to look at different internal metrics – reach
social media
of your messages, effectiveness of your advocacy
platforms, and use tools like LinkedIn Elevate to
will become a
demonstrate returns on investment across all dif-
ferent strategies. key method to
“With recruitment – can we show that the number
of applications we get in is more than it was before?
get messages
“For existing staff, we have an internal employee
in front of
survey every couple of years – this is to see if there
are metrics in there that we can target such as “I
customers.
have the tools to do my jobs” and “Do I feel closer
to my customers?” Using social media internally, we
discovered that regular participation in addition to
the survey feeds back information to us on how we
need to shape the business to get the best perfor-
mance and returns on investment on our staff.

“Our broker and intermediary teams are more in

touch and engaged with their base than ever. Our
direct sales staff enjoy regular, non-business inter-
action with customers highlighting the returning
importance of a real relationship with a client.

“GDPR could mean that social media will become

a key method to get messages in front of custom-
ers. Our focus is on creating content we know that
works. Our is a relationship business and face-to-
face and all other methods, most certainly includ-
ing social media, build those relationships.”
We extend our
invitation to you to
join us at Social Media
in Finance 2018.

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