AN ARTICLE OF EMMA KEENS ABOUT SOCIAL NETWORKS AND BANKERS

Hedgehogs – the social network for bankers

Emma Keens

Social media has been the buzzword of the past five years, with everybody, from your best friend to your boss, being a member of Facebook, LinkedIn or Twitter. Love them or hate them, social networks have changed the way that we communicate, becoming an essential tool for marketers and a barometer of social opinion.

The financial services industry has not let this opportunity pass it by. Banks have shrugged off their stuffy images to promote new products on Twitter and professional services firms such as Ernst & Young have set up Facebook groups to build contacts and relationships with potential employees.

Thus far, the success of social networks aimed directly at financial services professionals has been limited — but change is afoot. Huge numbers of redundancies have meant that go-it-alone bankers have found themselves without the level of support that once they were accustomed to. One site that has identified this gap in the market is Hedgehogs.net, a social network set up by Ken Yeadon and Mike Powell, two former HSBC bankers, that is aimed at smaller hedge funds and investment bankers.

According to Mr Yeadon, the “fundamentally social” nature of banking is what drives Hedgehog’s 2,700-strong membership. “In a large institution, you take for granted that you have a natural set of reference points around you,” he said. “If you come up with a new investment hypothesis, you have instant access to analysts and market makers and so on to test it out. But that is gone once you are in a smaller outfit.”

Experts agree that there is a case for bringing these communities together, but Ian Maude, of Enders Analysis, the media and technology research firm, believes that such sites need to offer more than mere social benefits to succeed. “A lot of these people already have their own networks through the traditional social media sites. What new sites have to ask themselves is what is they offer in addition,” he said.

Mr Yeaden argues, in turn, that he has that issue sewn up. Hedgehogs, which is in its Beta phase of development and feedback as it approaches its fully formed final appearance, not only aggregates news and other social media into one “dashboard” or toolbar, but is said to be the first site to also offer an outlet for members — who could be anyone from analysts to fund managers — to distribute their services.

Moreover, this is only the beginning of Mr Yeadon’s vision of a “social marketplace ... The second issue we identified is that smaller players do not have the same access to expensive data services, such as Bloomberg terminals,” he said. To address this, Hedgehogs is in discussions with financial data providers, such as Thomson Reuters, about offering ad hoc subscription models to members. “The idea is to create a supply chain, where users can get access to the services they need, but also sell their own product and grow their brand at the same time. If they are good, then other users will comment and recommend them.”

Joe Omansky, the founder of SkyRank, the Princeton-based hedge fund rating system, joined Hedgehogs a few months ago and already sells some of his services on the site. He plans to offer a full range in the near future. “Time will tell how much business it will bring in the long run, but if you annualise the performance over the past couple of months, I would say between 25-50 clients,” he said.

Another reason that many financial social networks have failed in the past is the diverse nature of their membership, drawing users from across the industry. Alistair Newton, research vice-president of the banking group at Gartner, thinks that common goals are the key to success: “Generalist sites work because they get lots of people together to talk, essentially, about nothing. Professional sites cannot work that way. They must focus around specific objectives, where sharing and collaboration can deliver tangible business benefits.”

Dawid Konotey-Ahulu, co-founder of Mallowstreet.com, a pension industry network, agrees that a clearly defined membership is key to building a productive dialogue. Mr Konotey-Ahulu and Rob Gardner, his fellow founder of Redington Partners, the pensions advisory firm, launched the site two months ago and already have signed up 200 members, all directly involved in the British pensions industry.

“Asset levels have declined catastrophically and it was clear that there was not enough communication in the industry,” Mr Konotey-Ahulu said. “Now trustees can draw from the wisdom of the crowd, but a targeted crowd, in a way that was not easily available before.”


MY PERSONAL OPINION:

From my point of view, I articulate this one the Emma Keens of Timesl, it reflects very well as the companies and the banks have started being interested for the phenomenon of the social networks. There is evident the impact that this are having in the companies, and these social networks can be in use for being announced or to invest in them as financing source for some banks.

When it started many social networks like facebook did not want to have advertisers in his pages, because it towards more attractive, but when this did not obtain anything, and they needed to pay the expenses that it needs to have a web page, it is for this that it started to having some advertisers and companies were announcing in these pages, like that some companies began to announce and the banks to begin to invest in this phenomenon that nowadays this is having very much success.

So, like say Emma Keens: "the financial services industry has not let this opportunity pass it by", and "banks have shrugged off their stuffy images to promote new products on Twitter", and the most important "the success of social networks aimed directly at financial services professionals has been limited"


BY: LLANOS MESEGUER