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Guest post by: Jo Stratmann Become an Author

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The current situation

Over the last few years there has been a rise in financial services communities that are on the long tail. In other words, there has been an increase in online communities that focus on a very specific audience rather than appealing to a wide range of clients and consumers.

Several banks have chosen to focus their social media strategy on one section of their customer target base. Royal Bank of Scotland, one of our clients, has developed a niche online community called Keep Britain Biking to appeal to motorcyclists in order to encourage customer interaction with their Devitt insurance brand. Barclays bank is using a niche community called 100 voices to appeal directly to students with the promise of a community that contains information "written by students, for students".

Young & Free Alberta, an online community powered by Servus Credit Union, also utilises the "youth" niche community idea.The site aims to give 17 to 25 year olds a head start with their finances by providing them with useful, relevant information about their financial requirements.

Not only is the site aimed at a specific demographic; it is also aimed at a specific region - Alberta, Canada. And with ‘Young and Free' initiatives in Alabama, Mississippi, Ontario, South Carolina, St Louis, Tennessee and Texas, all powered by local banks, these niche communities clearly aim to capture people at a time when they are selecting their first bank account. By building up a relationship with a young target audience, the Young and Free communities are engaging with customers in the early stages of their financial planning with the hope of then building up a life-long commitment to their bank or institution.

The Young and Free Alberta community uses blogs, forums, YouTube, Twitter and Facebook to encourage discussion. It also contains lots of relevant information and activities - like inviting people to an open-air movie -to attract its key audience.

The site also contains an "ask the experts" section to answer the financial concerns and queries of their target market in a timely and appropriate manner. The community manager has videos, blogs, comments and a very visible presence on the site, perhaps as way of further positioning the bank as a voice of authority.

What does the future hold?

Considering the rise of the niche community in financial services, indications for the future direction of social media in this area could include:

• An increase in targeting specific groups based on demographic. Social media could be used to uncover and engage more with micro communities, based on key demographic segmentation, that are enthusiastic, passionate and keen to become customers.

• An increase in targeting specific regions or areas. Social media could be used more to target regional rather than global areas. Local branches of banks and other financial services institutions could use niche communities, based on location, to attract new customers by appealing to people near to, or in, their own physical space or location.

• A decrease in corporate communities. As communities become less "corporate" in feel the will move away from using the direct branding, look and feel of the institution they represent. Instead the branding, tone and style of the community will be dictated by the needs and requirements of the people they wish to target rather than the bank or institution itself.

• Niche communities will become more social. They will utilise more user generated content and will form the hub of all social activity, from blogging, to Facebook, to Foursquare, as well as whatever other new tools arrive on the social media landscape. Niche communities will form the permanent base for social media activity - a space which can grow and develop in line with both market changes and new developments in social media technologies.

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