More Financial Firms Embracing Social Media

More major financial service companies are embracing social media according to a new report from market research firm, Corporate Insight.


The report found that 15 percent of the firms have added significant social media features to their online platforms in 2008, and 70 percent have developed online communities.


“Two years ago, very few financial services companies offered social media features,” said James McGovern, Vice President of Consulting Services at Corporate Insight.


“That was before social media really exploded in popularity. Now, sites like Facebook and YouTube are some of the most recognized destinations on the Web. Financial institutions are beginning to understand that customers want the ability to share knowledge with fellow customers, especially given the challenges posed by today’s investing landscape.”


Overall, the report found that online communities are rapidly growing in popularity but companies are using them for a variety of reasons, from collection customer feedback (Schwab) to marketing themselves to clients and customers (American Express).


In addition, many brokerage firms have turned to social media, using online communities to engage clients and provide a platform for investors to communicate with each other.


Six of the 20 brokerage firms studied have YouTube channels. OptionsXpress, Scottrade, Vanguard, Wells Fargo and Zecco all feature investing ideas and tools on their website.


Eight of the 20 banking and credit card firms tracked have YouTube channels. Bank of America and Citizens Bank feature content from their viral marketing campaigns and American Express focuses its channel on philanthropy.


American Express, Bank of America and Capital One have also developed their own online communities geared towards small business owners. Visa has launched its own Facebook application targeting small business owners.


“We’re at the beginning of a major new development that will have a significant impact on the way firms serve Generations X, Y and beyond,” said McGovern.