BOSTON -- Financial services firms are now using social media to get customers involved in online discussion forums, advertise services and monitor what's being said about their businesses.
"Every bank is already involved in social media... whether that's part of a conscious strategy or not," said Susan Feinberg, a commercial banking analyst at TowerGroup, a market research firm focusing on the financial services industry. "Your clients today are using social media all the time for both personal and business purposes."
Feinberg spoke at TowerGroup's annual financial services conference here last week .
Businesses need to master social media, she said, pointing out how powerful social networks have become as communications tools. Currently, Linked-In is the hottest social networking site for B2B communications, growing by a million new users every 12 days, she said.
"And it's not to share information with friends, or which restaurant you love. This is all about business," Feinberg said. "I think social media is becoming a language of commerce. It's not the only one, but clearly is one. What I'm seeing from social media perspective is revolutionary and changing lives in ways that could not have been predicted."
Feinberg then asked the roughly 250 attendees of her conference session if they had checked their Linked-In accounts within the past 24 hours; about 80% raised their hands.
Feinberg said social media is being used to build B2B communities and to increase customer engagement with financial services institutions. Businesses are also using social networks to disseminate information for marketing or for internal product development purposes. "The risks are not managing the process," she said. "Everyone is already participating whether you want [that] or not. You're missing an opportunity to take in valuable client [ideas] for market development."
Leslie Klein, head of Global Transaction Services (GTS) marketing at Citigroup, said her company's social networking efforts are paying off in several ways, though there's no easy way yet to calculate a return on investment in terms of dollars.
"From a quantitative perspective, are we driving more visits to our websites? Absolutely," Klein said. "Are we getting more views of our press releases? Yes. Are we seeing more dollars? That I can't say, but can I quantify that I'm getting our message out more effectively? I can definitely say, yes. It's about making sure you have a dialogue with the customer."
Citigroup uses Twitter to post press releases, promote its latest products or, for example, publicize the fact that it took part in the Sibos financial services conference last fall.
"Using Twitter, we increased fivefold the visits to our websites," she said. "When we use twitter, we'll sometimes embed links to more information. We're building new tools now for deep dives to analyze what people are looking at in our posts, and what links they're clicking on."
Externally, the company also created a collaborative online banking platform called the CitiDirect BE Media Channel for online training and user support throughout Citi's operations in more than 100 countries. CitiDirect BE provides users with a central repository of information on critical topics in treasury and trade services.
Recently, more than 4,000 GTS employees from 88 countries logged into one session, creating more than 6,800 postings on four main discussion forums on product development, unlocking opportunities for corporate growth, monetizing new products and working smarter, Klein said.
Built on Microsoft .Net and Microsoft Office SharePoint Server 2007 Enterprise Edition, CitiDirect BE is designed to offer treasurers of Citi's corporate clients a more intuitive interface for initiating payments and handling foreign exchange transactions, among other things.
Internally, Citi has been creating online discussion forums where corporate clients can share ideas about best practices and other subjects. It has also set up online collaboration sessions for GTS employees, where members of teams that handle specific corporate clients can discuss topics such as internal product and sales development or how they can improve or add services.
Another recent project involved setting up a network of employees around the world with webcams on their desks who create YouTube-style videos about banking news for corporate clients.
For example, during the recent political turmoil in the Middle East and after the hurricane and tsunami in Japan, Citi employees posted videos explaining which offices were open and how services had or had not been affected. "This is really tapping the power of a global network," Klein said.
Klein also mentioned an online monitoring application from Revinate , which she recently read about in an article in the American Airlines in-flight magazine , American Way. The application keeps track of potentially damaging comments about hotels on social media sites such as Facebook , Twitter, YouTube Twitter and TripAdvisor.
The service provides hoteliers with real-time updates on what's being said about their properties.
"All the major hotel chains signed up for it. This gives hotels an opportunity to respond," she said. "They can thank customers through this. And if it's a negative comment from a customer, it gives them a chance to change them from a dissatisfied customer into an advocate.
When creating a Web 2.0 strategy, it's important to define objectives -- "what you're trying to accomplish and what role social media play," Klein said.
After that, she said, it's no different than any other project in that you must have a design stage that focuses on the resources and content needed, a deployment stage focusing on risk mitigation and legal and compliance impacts, and a monitoring stage that determines how well the online strategy is working.
Also, make sure that you have executive buy-in and that you partner closely with your legal and compliance departments.
"Don't mistake social media tactics for strategy. It's not a strategy to say 'I have to be up on YouTube' -- you have to identify a purpose," she said. "And be ready to feed the content beast."
Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian , or subscribe to Lucas's RSS feed . His email address is firstname.lastname@example.org .
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This story, "Banks Go Social to Collaborate, Reach Customers" was originally published by Computerworld.