Social media and corporate dialogue: the response of global financial institutions

The aim of this paper is to analyse the extent to which global financial institutions are using Web 2.0 technologies and social media initiatives to transform the way in which they perform their corporate disclosure, that is, if these entities are opening a real corporate dialogue.

The web sites of 132 major global financial entities – in Europe (54 entities), the Asia‐Pacific region (55) and the Americas (23) – have been scored according to a Sophistication Index, considering various relevant Web 2.0 technologies and social media implementations. The analysis, by means of least squares and logistic regression models, is consistent across both techniques.

Web 2.0 technologies and social media are not fully available in the corporate reporting arena. Nonetheless, a significant influence is detected. The size of each entity and the region in which it operates influence the scored utilisation of Web 2.0 and social media initiatives.

Web 2.0 tools and social media initiatives have been researched via corporate web sites. Corporate visibility in the major social networks, and also the use of advanced web metrics, will remain topics for further research.

A lack of strategy for implementing an effective corporate dialogue is clearly observed. Based on these findings the banking industry and the supervisory authorities, which are under special scrutiny due to the recent global crisis, can take much greater advantage of the potential of social media to open a real corporate dialogue, increasing the level of transparency.

As social media are becoming more useful and ubiquitous, both academics and practitioners need some initial and reliable background data on this preliminary situation. The extraordinary role of protagonist that the banking industry has played in the recent economic upheavals justify its selection as a first sample for this exploratory study.