THE GREAT PARADOX OF THE ‘SOCIAL’ PRIVATE BANK (CLUE: IT’S NOT THE SEMANTICS)

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By Casey Nicholas and Joseph Ebin in London, and Basel Raslan in New York

In 2017, the penetration rate of social media in the US reached 70% – the largest in the world. During the same year, the number of data breaches in the country reached a record 1,579 incidents. For wealth management marketers, the figures represent a complex challenge – there are certainly wealthy customers to be found online, but ensuring the highest security standards means that reaching them is no easy feat.

Cultivating a compelling digital identity can help firms to foster engagement with clients and reach new audiences. In our recent CMO Survey, 86% of Chief Marketing officers cited ‘online experience’ as the top driver of positive client engagement and many are reorienting budgets from traditional to digital media to capture this opportunity [Figure 1].

Figure 1: Wealth management firms marketing budget allocation

 

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Source: Scorpio Partnership CMO Survey 2017

However, high profile hackings – like that on consumer credit reporting agency Equifax Inc, in which data from 145 million consumers was exposed – highlights that criminals, scammers and ‘hacktivists’ are not afraid to go after big fish when it comes to cyberattacks. While CMOs recognise the clear opportunity for digital engagement, they also reference the integration of digital tools and technology as one of their most significant challenges.

In part, this nervousness can be attributed to not being able to control the behaviours of those engaging with digital channels – particularly social media.

While clients may care to protect their bank accounts, they are more laissez-faire when it comes to social media security [Figure 2]. For example, many social media users use their networking accounts to authenticate access to other apps and services – which could hold data such as credit card numbers, purchase histories, street addresses and relationships. This means a hacker who compromises one social network can potentially break into other sites too, stealing sensitive personal information.

Figure 2: App or account types respondents cared most to protect (global perspective)

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Source: IBM ‘Future of Identity Study’

For employees too, there is also a risk. On social media – where the atmosphere is more relaxed and personal – the tendency to share certain information on both personal and professional social networks is greater. As a recent Forbes article highlighted, “Suddenly, the fact that you publicly tweeted that you went to a leadership conference can be used to craft a targeted phishing email containing a malicious link. While the Nigerian princes of yesteryear might instantly raise eyebrows, if an email is customized to the recipient, the likelihood of the intended response (in this case, a click-through), increases.”

As marketing budgets continue to shift away from traditional strategies and towards digital, ensuring that online platforms have the appropriate security procedures is only the beginning. To overcome unease businesses must coach clients and advisers on how to use these platforms.

For clients, this means taking a proactive approach to education about how to be safe online. This is something Barclays have done particularly well through their Digital Eagles campaign, which not only helps users to grow in confidence when using the internet, but also provides information about how to avoid getting scammed and spotting fraudsters.

For employees and institutions, clear and consistent social media usage policies guiding account visibility, event creation, public sharing and ‘tagging photos’- are paramount.

We certainly don’t want our clients to step away from the digital world – in fact, we love engaging with you across all our social channels (you can follow us here) – but we do want to ensure that as wealth firms reach out into the digi-sphere, they take a positive and proactive approach to cyber-security.

 

News from the world of wealth:

UBS to push harder on wealth management acquisitions – Bloomberg

The global wealth management platform market is expected to double by 2022 – PR Newswire

Swiss bank Julius Baer enters Thailand’s wealth management market – Nikkei Asian Review

Deutsche Bank plans to raise EUR1.8bn in wealth management IPO – The National

 

Thought of the week:
“Assumptions are the termites of relationships.” –  Henry Winkler

 

 

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