Why Goldman Sachs and Wall Street Need Twitter and Social Media or will Extinguish Like Dinosaurs
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Recently Goldman Sachs the Wall Street giant joined Twitter. On this follow up I decided to write my thoughts about how Wall Street, and the financial industry in general, need to adopt social media business urgently. The below thoughts comprehend an analysis how the financial industry is affected by new media and particular by social media, and how that is opening their management, boards decision and way of doing business and affecting their stock value and investment strategies. In some cases using properly Social Media can somehow support or damage the stock value.
Goldman Sachs (NYSE: GS), in an unique statement joined the social media real time influential and second biggest social network, ironically one week after the Facebook IPO. Is this an era of openness, the fact that one of the sacred, loved and at the same time hated players of global finance joined Twitter?
Goldman Sachs is the American paramount financial global multinational investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients and governments. This move means a lot for the digital current status of financial industry that will have to open its doors to a new cloud computing, social media business world.
Goldman Sachs inaugural 140-character message was to promise updates and was released in the time of its annual recent meeting:
Goldman Sachs @GoldmanSachs
We are now live on Twitter (finally) at the GS Annual Meeting. Follow us here for updates on our work, our research, and our people.
Goldman Sachs’ online presence has been in the need of social media PR professional attention. It is quite extraordinary how one of the biggest world organizations has managed so badly its PR and recent social media profiles and position, or worst its preoccupying lack of social media position.
Goldman Sachs Facebook page with 15,331 fans is a social media example of what not to do and worst it is strewn with negative serious corporate and brand damaging comments.
And this damage is not just on a PR, communications social media crisis. Goldman Sachs Group Inc. saw $2.15 billion of its market value wiped out after an employee assailed Chief Executive Officer Lloyd C. Blankfein’s management and the firm’s treatment of clients, sparking debate across Wall Street, and all over the global social media landscape. In the follow up, the shares of the company dropped significantly after London-based Greg Smith made the accusations in a New York Times op-ed piece.
On top of this, thousands of Twitter users get regular updates from an account that ridicules the firm: @GSElevator. This account created recently claims that its profane and provocative messages are snippets of dialogue overheard at the firm and has been part of a campaign orchestrated to put out a negative image of this major global investment bank.
So why is not Goldman Sachs understanding how web 2.0, social media and Twitter constitute a largely untapped necessity and a marketing and business opportunity?
Other Financial major players, namely Morgan Stanley are adopting Social Media and Twitter and know they need to do it.
Goldman Sachs is not the first large Wall Street firm to take to Twitter. A lot of international banks and investment hedge funds are taking Twitter and all social media very seriously. Some of them are using it to improve trading and are developing sophisticated smart ways of improving operations with both social media sentiment and Twitter insights. Others are looking at influencers and social media monitoring tools to understand trends, needs for their customers and investors. Others are engaging massively in social media for customer service.
And they know that it is a must to do it urgently. They understand that the new financial customers, clients and public are social media savvy users and are using and adopting into their lives an immersion in all the social media arena. Social media business is disrupting old ways of doing business and innovating in parallel with cloud computing and other technology’s ways of learning and is specially changing habits of doing business, investing and moving. And they are doing it faster than in any time in history. So it is urgent to move, engage and have a strong position on this new way of doing business, social media business.
Other big Wall Street players and most of the world's biggest financial players are moving into Twitter. Some examples are Fidelity Investments with 48,733 followers, @saxobank with 12,776, the private equity firm Blackstone Group that maintains an account that is periodically updated by its public relations staff.
Morgan Stanley (NYSE: MS), the other Wall Street giant is much more advanced in social media and meanwhile, is seriously exploring the use of Twitter via its retail brokerage, Morgan Stanley Smith Barney, where its financial advisers have been given limited access to social media. Also other financial giants such as Reuters and Bloomberg have completely adopted the social media canon and understand how important social media and Twitter in particular are shifting and disrupting the trading and investment world.
What Goldman Sachs Twitter account means to Wall Street and the Financial Industry?
Within its first days, the Goldman Sachs Twitter account has over 11,544 followers, but is not following a single account till the present date. Ironically the popular in-house mocking-machine Twitter account @GSElevator, that has been a massive PR crisis problem and headache for the Wall Street giant, has 261,000 followers.
Goldman has recently tried to open up a bit its secretive management and strategies, putting Lloyd Blankfein on multiple television stations in one day. But this is not enough and the company realized that. Social media is no longer just a defensive way to correct damage when there is some PR issue(s). It needs to be in the core and DNA of organizations. And the organizations that lack the will power to change or move will face serious growing problems and will be disrupted.
Goldman Sachs and the financial and trading industry need to move faster and understand that the time is flying and they need to see that the world where they are doing business, their clients and public opinion is no longer the same. Social media is disrupting massively the financial industry and even the sacred players, will be massively disrupted sooner or later.
Hopefully they understand this and that this move is not just an early attempt for Goldman Sachs to get out in front of a possible Twitter IPO, given the fact that the other Wall Street rival giant Morgan Stanley seems to have stepped (and crashed) all over itself with Facebook’s launch.
Goldman Sachs is also in Linkedin and in Youtube: http://www.youtube.com/user/GoldmanSachs.
The power of Goldman Sachs and its relations with the world economy and politics is clear when looking at the list of former employees of Goldman Sachs including Robert Rubin and Henry Paulson who served as United States Secretary of the Treasury under Presidents Bill Clinton and George W. Bush, respectively, as well as Mark Carney, the governor of the Bank of Canada since 2008, Mario Draghi, governor of the European Central Bank and Mario Monti, the Italian Prime Minister, among many other illustrative personalities.
A fast pace social media ecosystem is generating a newly-emergent global financial industry disrupted 360 degrees.
Goldman Sachs move into Twitter will hopefully convince the last skeptics in the financial and banking sectors that are still holding a move into social media. Social media is not a fashion but a new modus operandi that needs to be in the heart of organizations across departments and specially with management.
The financial and banking world has necessity to ingress in the open and transparent world of social media. Moreover the indistry has to see this world as a new opportunity to learn and improve its business operations and relations with employees and clients. The sooner they will do it the better. Or else they will extinguish as dinosaurs in a new financial and investment ecosystem that is changing faster than ever in history with the emergence of social media real time money, investment and trading communities and crowd funding financial new players.
Moreover there is a fast pace ecosystem that is generating an emergent global disruptive cottage 360 degrees financial new industry. Adept start-ups act as guides on Wall Street’s, the Citi, Singapore, Hong Kong and the main global financial districts move into the social media adventure, providing the software, data and insights that helps firms comply with massive amounts of new insights, sentiment and regulations and compliance that date to a sleepier old era of closed communications.
In a time when news makers, analysts, and experts and their constituents, affirm that the sky is falling no one can run away or hide from the very grim reality. But panic only leads to the further declination and eradication of progress. So the way is to change, learn and write a new storytelling with new transparent colors, specially the ones possible with the new tools and platforms cloud computing and social media so fantastically is opening and putting in hands.
Wall Street, the CITI and all financial centers for the financial and investment industry need to move to Twitter and social media. Moreover they need to move forward and take it seriously into their DNA. It is not just about social media business ROI (return on investment) it is on Return on Ignorance (about your brand, clients, business) and specially ROA (Return on Attention).
It is this or get extinguished as dinosaurs.
This article was first published in Why Goldman Sachs and Wall Street need Twitter and Social Media or will Extinguish Like Dinosaurs . All the views on this article are mine.
dinisguarda has no positions in the stocks mentioned above. The Motley Fool owns shares of Citigroup Inc and Facebook. Motley Fool newsletter services recommend Facebook and Goldman Sachs Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
Dinis Guarda is co-founder of timizzer.com, socialmediacouncil and openbusinesscouncil.com. Dinis Guarda’s background experience is in international management, marketing / communications, web, publishing and content working in initiatives with UN, governments, financial companies, MasterCard, Philips, Reuters, P&G, Alcatel, Vodafone, Nike amongst other. On a business, creative and entrepreneurial level.
During 2008 and 2011he co-managed Saxo Bank’s web / online marketing global plan of action, its localization, video and tech related subjects. He defined & managed social media strategy for the organization. He created tradingfloor.com and co-developed the business web platform of the Spanish / Latin America websites saladeinversion.es and saladeinversion.com. He is a guest lecturer at Copenhagen Business School and an active speaker in conferences and other educational events and workshops. With an MS in New Media, he writes regularly in dinisguarda.com, industry websites, magazines and has been publishing books and magazines. All the views in his posts are personal.