Social Media Topic - Latest Feedback from the Academic Review Board

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Recall that the question posed was “To what extent, if at all, does the rise in social media affect the fundamental business model of financial services.” Many answers showed a good understanding of contemporary aspects of social media and its use by individuals and by some firms. A number of terrific corporate examples were given. Quite often there was evidence of a lot of research, drawing upon some of the best known studies of the use of and consequences of social media for firms. All of this was very impressive. Of course, the answers submitted differed in content.
The principal differences were as follows:
1. Some effectively distinguished between the characteristics of social media and the internet in general. One clear differentiator was the thought given to user-generated content and exchange between parties—two key features of social media--and their consequences for financial services. Unfortunately, some answers conflated the impact of the internet in general with that of social media.
2. Surprisingly only a minority of answers clearly stated what they took to be the scope of the financial services sector—often as a prelude to concentrating their analysis on a subset of the activities identified. There is nothing wrong with focusing on one or two of the major commercial functions performed by this sector, especially if you have a lot to say.
3. Another differentiator was whether the way in which commercial value is created in financial services before social media were identified and whether the impact of social media on the pre-requisites and means of such value creation were discussed. 
4. Few made resort to analytical tools concerning social media or corporate strategy. For example, Porter’s 5 forces and the resource-based theory of the firm might have provided useful frameworks to extract insights on the impact of social media for financial sector firms. Those with a political science training might have reflected on how social media tools could help firms in their lobbying or media management strategies. Economists might have reflected on how social media affected the forces of supply and demand in a market, using these considerations to draw out implications for firm strategy.
5. By and large, most answers argued that the rise of social media would have profound implications for financial service sector firms. Only one or two answers presented doubts about the long run impact of social media, especially in the wealth management function of financial services where face-to-face interaction and secrecy may well remain important confidence-building features of that business.
6. A number of very interesting arguments were made concerning the threat that social media could become as it enables small and medium sized firms to raise alternative sources of funding, thereby reducing demand for bank-provided credit.
7. A few answers developed their arguments sufficiently to offer recommendations for the providers (often units within large firms) of specific financial services.
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