Financial Institutions adopt Social Media

Today most of the financial services companies are busy taking a stock of their losses and looking for optimistic signs in their books. While the financial pundits predict the possibility of reviving the economy, I believe listening to your customers is what’s missing in most of the companies. Many financial and non financial companies are busy implementing what then want to but not what the customer needs.

In the era of Internet, Financial Institutions need to cautiously but firmly make place in the Social Media world to receive feedback from the customer. Twitter, Facebook, MySpace, Linked In are some of the many sites which can as agents for these companies to spread their message.

Many banks have presence on the Facebook, but lack of transactional capability may not attract customers to become a fan or member of that particular page. Having an information page about the products and services would be a good start with, but may not be immensely popular with the customers. Tapping Facebook will require banks to come up with a tricky formula of entertainment, sales and information in addition to providing a secure environment. Yet Facebook’s urge to go public with its user data may be discouraging for many financial intuitions to associate themselves with this website. To meet the legal and compliance requirements would be another horrendous task.

During my research, I came across an application on Facebook that allows users to perform financial transactions - Fiserv's MyMoney, which is now only available to credit unions, and may be offered to banks in the near future. Facebook users download the application, which helps them find and join a credit union,  view account histories and balances, and make transfers.

Bank of America, Wells Fargo, ING DIRECT and First American Bank are among the many financial institutions using Twitter for marketing. Twitter is a tool which can be used to directly interact with your customers and inform them about the services. The live time reply facility on Twitter can help a company obtain feedback or resolve customer issues. Twitter can help bank’s build long term relationships and give a more personal feel to it. Click here to follow your bank on Twitter

As I said before, financial institutions need to be Cautious with their presence in Social Media. One of the possible threats could be a fraudster posing as a bank employee and asking customer for credentials by setting up a similar profile. Online squatter could register themselves on financial institutions name on social media sites and then negotiate with the companies to buy them back. Alternatively, phising attacks are anyways looming on the Internet and you may be redirected to a site where there is possibility of compromising your personal details

Banks are yet to experiment with this space to come out with a solid working model. Expecting a ROI on spend is not the way forward, as Social Media is still in its infancy stage trying to develop such a model. This is just another form of communication tool available to reach to your customers which will ultimately in long term bring the dollars.