15 May 2009

Banks try social networking, jump on Twitter wagon

12 05 2009 - Social networking is becoming an increasingly popular way for banks to reach consumers amid the economic downturn.

Wells Fargo (WFC) and Bank of America (BAC) have begun to "tweet" — post messages of 140 characters or less on — with customers about everything from bank fees to product features. Discover Financial (DFS), American Express (AXP) and Citigroup (C) have launched Facebook or MySpace pages. Some banks even put marketing videos on YouTube.

"Social media is a whole new world, and you cannot afford to not be a part of it," says Pamela Blase, a spokeswoman for UMB Financial of Kansas City, Mo., which tweets about everything from the bank's financial stability to the industry's prospects.

Banks say they're establishing presences on social-networking sites to tap into a growing demographic and to control the conversation about their brands. Yet the economic turmoil, some say, makes it even more important to reach out to customers any way they can.

"There's a lot of worry out there," says Ed Terpening, vice president of social media at Wells Fargo, one of the first banks with a group of employees dedicated to social networking. "That means that we have to stay close to our customers."

The appeal of social networking, according to Steve Furman, Discover's director of e-commerce, is that it provides "pure, instant" communication with customers.

In general, banks and card issuers have been slower to embrace social networking than other industries have. But social networking has become popular enough that, for many institutions, it's not a question of if but when to establish a presence on these sites, says James McGovern of Corporate Insight, a financial-services research firm.

Yet as a growing number of banks become proficient in the social-networking world, the norms of customer service are being upended. Increasingly, today's online interactions between banks and consumers are peppered with shorthand, typos and even slang.

"It sounds like you need 2 talk 2 someone abt your specific situation," read a recent Twitter post from a Wells Fargo rep.

Adding to banks' challenges, social-networking sites are becoming another venue for consumers to complain — and complain is exactly what they're doing as credit card rates and fees rise even as the economy struggles and unemployment rises.

Jesse Hattabaugh, a software engineer from San Francisco, recently posted this message to banks on Twitter:

"Stop making your living off my late fees! You fine me more than you loan me!"

Source: Usatoday

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