Financial professionals have been slow to foray into the social media realm – a hesitancy which some have speculated stems from concerns regarding reputational and security risk. There are some indications that this may be changing, however. In a 2011 study by American Century Investments (see chart below) half of the financial professionals who participated in the study said that they were either moderate or extensive users of social media. A further 35% claimed to be “lurking in the shadows, trying to understand the value”.

While many investment professionals are still ‘lurking’, most are participating regularly in social media. Half of the financial services professionals participating in the study indicated they have moderate or extensive experience with social media.

“I think that slowly there is going to be a shift,” says Nasreen Quibria, an Executive Consultant and Payments Expert for CGI. “There is going to be more uptake as treasurers and financial professionals more broadly, become more comfortable with social media as they realise the value-add of these tools.”

Judging by the growing levels of activity in discussion groups on the LinkedIn website, it appears to be largely the networking function of social media that is currently attracting most interest from the financial community. LinkedIn is used principally as a tool for self-promotion and connecting with industry peers. These benefits, Quibria believes, have become increasingly important in recent years. “Treasurers and other financial practitioners are using social media more for personal or career reasons,” she says. “In the current uncertain economic environment it has become particularly important, as it is a way for you to establish a positive image and promote yourself online.”

But for those treasurers who do put aside their reservations and embrace social communications, there are, she says, a number of potential pitfalls of which they should be aware.

One common mistake that Quibria highlights is typically made before the professional even begins to interact with peers. Sometimes, financial practitioners new to social media will not pay enough attention to building a professional looking profile – the first impression given to a potential interviewer. An unprofessional or clumsily taken photograph is one example of a hazard that should be avoided, Quibria stresses.

Source: American Century Investments

Building Treasury 2.0

Social communications are beginning to find some level of acceptance within the financial community – at least from a personal, networking perspective. But whether a site such as LinkedIn has any practical benefits for the corporate treasurer beyond keeping in touch with industry peers and finding out about the latest job opportunities is doubtful, most experts agree. According to Daniel Andres, Business Development at Entarena, the benefits of traditional social media platforms are rather limited. “For the finance professional, Twitter is useful mainly for collecting information, to find out what is going on within the treasury community and keeping up-to-date with new developments,” he says. “LinkedIn can be interesting from a networking perspective, for promoting yourself and perhaps finding suitable candidates for open positions in your finance department as well.”

But that is where it stops for the traditional social media platforms. Their usefulness from a treasury perspective, he suggests, “is fairly limited, since it never really enters the daily business processes of the treasurer, accountant or cash manager.”

But what if the traditional social media platforms could be adapted to better suit the treasurer’s requirements?

In the past few years, several platforms have been launched aiming to do just this. One of these is Entarena, a communication platform launched in 2011, which builds upon the two most useful aspects of social media: the collection and communication of information, and integrates this with existing business applications. The system, which was recently adopted by the German airline Lufthansa, allows the corporate treasurer to create customised dashboards around each bank relationship. The dashboards have the capacity to combine internal data from ERP, trading, treasury and banking systems with external data such as market news. Notifications can then be delivered relating to key news or events and the treasurer can additionally use the dashboard to communicate any relevant data either internally or externally.

“There is going to be more uptake as treasurers, and financial professionals more broadly, become more comfortable with social media as they realise the value add of these tools.”

Nasreen Quibria, Executive Consultant and Payments Expert for CGI

“Treasurers still see social media as a marketing tool or a sales-driven initiative within the company,” says Andres. “But having a platform and a solution that brings communication in-house and around your daily job, so that it becomes an integral part of the workflow of a treasurer, is when we can see huge benefits.”

However, he acknowledges that the industry is still only at the beginning when it comes to applying social technology into business workflows, adding that “there are currently not many solutions out in the market which have been built with the focus on directly building social communication into the work processes.”

But Andres isn’t the only person to recognise the potential of social communications for use as a business tool. Last year, Daniel Marovitz, former Global Head of Products at Deutsche Bank’s Global Transaction Banking division, founded buzzumi, a cloud-based platform that powers professional conversations online. Unlike other products in the online meeting or conferencing space, it enables a company’s employees to have meetings and sales conversations online in a fully branded environment, while giving managers full auditability and control.

Marovitz himself is no stranger to the world of social media having previously spearheaded Drive DB, a successful web-based community site which allowed Deutsche Bank clients to participate in product design and development through online voting, debates and information sharing. With his new project, buzzumi, Marovitz is once again demonstrating that social media can indeed work in a financial professional setting.

“Security concerns are diminishing. IT departments always look into the security aspect and in most cases they come to the conclusion that the technology is as secure, if not more secure, than internal systems.”

Daniel Andres, Business Development at Entarena

“Our new platform buzzumi is all about empowering professional conversations,” he says. “The issue is that, particularly in well-regulated industries such as finance, there is a lot of difficulty using tools that are intended for the consumer world – they are just not fit for purpose. Online sales meetings need content control and recording that can satisfy the demands of the compliance department.”

buzzumi offers several functions which Marovitz says businesses will not find anywhere else. Firstly, the platform is a fully brandable environment. So unlike the market-leading VOIP platform, Skype, only the client’s brand is visible. And the interface can be customised to reflect the look and feel of the client’s existing web presence. The second unique feature, he explains, is that a company can perform a range of different interactions, removing the need for multiple platforms. In the near future, the platform will also offer integration with leading client relationship management (CRM) platforms, such as Salesforce.com.

The platform also provides dashboards complete with integrated analytics. So if a company was to empower its sales force, for example, with the buzzumi tool set, when they talk to clients over the platform the company can monitor all the details of the meeting – what was talked about, what presentation was shared, how long the meeting lasted, etc. Of course, there is inevitably a degree of intimacy which is lost when face-to-face meetings are exchanged for web-based video conferences, he acknowledges, but what a company gains is more control. “This platform allows you to govern all those interactions. For example, we have built-in content libraries that are controlled, so you can be sure that only presentations that have been approved by legal and marketing are being shared with clients.

This means a company can create a sales force that is much more efficient – firstly, because they are not running around the world, burning time and travel cost; and secondly because the tool set gives the company more control around what each person is doing.”

Quibria agrees with Andres and Marovitz that the potential for improved and more efficient communication is where treasurers and the financial profession as a whole will find the real benefits of social media. “I think where they can really leverage the tools of social media is with project-based engagement – where managing projects via email attachments is not necessarily efficient,” she says. There are various applications now on the market which can provide more transparent work schemes, which can enable treasurers to share resources, track items, and using the cloud source innovation to effectively collaborate remotely with other colleagues in different locations.

“One of the tools that we use at my company is a platform called Yammer,” she says. With approximately 72,000 employees at CGI globally, Yammer, a private social network for enterprises, is an extremely useful engagement system to have, she says. “It is a fantastic tool for identifying and communicating with individuals within the organisation,” she says. “Whether the individual is in Europe or Asia, finding the right person and then learning from and leveraging their expertise is a lot faster and more efficient than using traditional communication methods.”

But is it safe?

The emergence of enterprise-specific social communications technology, such as Entarena, Buzzumi and Yammer, shows that traditional social media technology is being adapted in some innovative ways for the corporate finance community. And as a result, there seems to be a growing consensus that social media can indeed provide tangible benefits for the treasurer and other professionals. But what might hinder greater acceptance of social media technology in the world of corporate treasury?

Security is one area of concern that continues to be a stumbling block to companies and business professionals in relation to social media. But Andres refutes the suggestion that this unease will persist in the long term. “Obviously all finance departments have concerns around the security of their financial data,” he says, “but look at market trends – you now have treasury and payment systems that are software-as-a-service (SaaS). Clearly these security concerns are diminishing. IT departments always look into the security aspect and in most cases they come to the conclusion that the technology is as secure, if not more secure, than internal systems.”

Marovitz believes security may still be a concern within risk-adverse financial professions. However, these concerns merely strengthen his argument for enterprise-specific social communications over the traditional, less secure social media platforms, he says.

“I think that security remains a fundamental concern, which is why we built our product with security sensitivity in mind,” Marovitz says. “Every single thing we do is encrypted, so you can’t even come to buzzumi’s marketing website without encountering encryption. Everything runs under SSL (secure sockets layer). We did all that at the beginning as a matter of course to ensure that we are positioned so that CIOs don’t have any concerns over our platform,” he says, adding that he wants buzzumi to be viewed as “rock solid”.

You can follow Daniel Marovitz on Twitter: @marovdan