Organizational Innovation: Social Networks
McKinsey sees a very bright future for social technologies. It defines social technologies as digital technologies used by people to interact socially and together to create, enhance, and exchange content (Chui et al. 2012). Social technologies distinguish themselves with the following three characteristics:
- • They are enabled by information technology.
- • They provide distributed rights to create, add, and/or modify content and communications.
- • They enable distributed access to consume content and communications.
Social networks are more and more important as a way to connect people. In some cases (for instance, private communications), the number of messages through social networks has become even greater than in traditional emails or SMS. Insurance marketing and sales can greatly benefit from the channel of social networks.
Social networks have proven to be a fertile ground for experimentation and innovation. Most people and companies think of social media first in terms of customer acquisition or customer service. There are several other ways in which financial institutions have or can use social media. These include:
- • Using onboard social media to create a platform for independent agents to come and share ideas, experience and expertise.
- • Capturing feedback and input from customers for use in product design. This is an excellent way to gain insight into what customers want in terms of channel design, new products, and other features.
- • Using off-board social media such as Facebook and LinkedIn to develop a recruiting presence, especially among younger individuals more likely to use these sites.
- • Employing social media to complement call centers, helping reduce the number of incoming calls and, in effect, helping customers to answer other customers’ questions thanks to the creation of communities.
- • Putting a “person face” on the company by publicizing charitable activities, sustainability initiatives, and other initiatives not directly related to insurance sales.
Celent surveyed the state of insurance in many countries with respect to social networks (Monks and Michellod 2014). The survey found that 68% of American companies use Twitter versus 42% globally, and LinkedIn is used by 57% in the region, compared with 35% globally. Reflecting this higher level of use, 91% of companies monitor what customers say about their brands online and in social networks, against a global ratio of 75%. In Latin America, countries such as Colombia have leapfrogged many developed countries and now have more active social networks than London and Paris.
The same Celent survey found that differently from their global counterparts, Asian insurance companies are less likely to use social media and mobile tools to interact with customers and agents: 30% use mobile apps, lower than half the global ratio of 61%. Facebook use is much higher at 60%, but still short of the global percentage of 71%. The infrequent use of apps and social media may suggest that insurance companies do not want to rely on such tools for business purposes. Similarly, there is a lower use of online and social media monitoring (56%, compared with 75% globally).
A lack of interest in social media may reflect a more general reluctance to use digital tools to engage in customer dialogue, at least for some types of communication. Differently from their global counterparts, Asian insurance companies are more likely to interact digitally with customers at financial stages (for instance, quotes, transactions, and payments). For example, 83% of regional insurance companies provide online quotations and 70% offer online purchase/transaction capabilities (72% and 66% globally, respectively). In contrast, 82% provide company and product information, and 49% educate customers about their brand values, compared with 92% and 63% globally, respectively.
Social networks are becoming more and more important as a way for connecting people. In some cases (for instance, private communications), the number of messages through social networks has become even greater than the number of messages exchanged through traditional emails.
"We have been hardening the product and readying it for outside institutions. Now we are at the point where the data showed the algorithms worked and we could offer them to financial institutions."—Jeff Stewart, CEO of Lenddo
Lenddo, a FinTech Innovation Lab alum, also leverages social media to enable borrowing. It provides loans of up to one month's salary to people in emerging markets based on the strength of their social contacts and has acquired more than 350,000 members globally.
-  See also http://www.shdeshare.net/AccentureInsurance/mastering-a-social-media-strategy-in-insurance-in-four-steps, Accessed 20 August 2016.
-  http://www.forbes.com/sites/tomgroenfeldt/2015/01/29/lenddo-creates-credit-scores-using-social-media/#1a1c5a243f79, Accessed 20 August 2016.
-  http://pfnyc.org/wp-content/uploads/2014/06/NY-FinTech-Report-2014.pdf, Accessed 20August 2016.