Financial Services Get Social


Facebook and Twitter aren't just for socializing and celebrity gossip.

Earlier this week we learned how Twitter can predict the action on Wall Street. But today a new report reveals how Wall Street is moving and shaking on Twitter and Facebook. Financial services' social media activity has exploded over the past two years, according to a new report by "Corporate Insight" that analyses the activity of 70 brokerages, banks, credit card companies and asset management firms.

The report: "To 'Friend' is the Trend: Social Media & Financial Services Today," breaks its analysis into three industry segments, and of the three banks and credit card issuers topped the list as most involved in social media. Over three quarters of all bank and card firms use social media, and most firms have multiple profiles on Facebook and Twitter. A third of these firms use Twitter to address customer service questions and about a quarter use the site to distribute commentary.

Retail brokers use social media in an entirely different way — they create separate online communities for active investors to discuss trading strategies and market trends. TradeKing, Charles Schwab and Zecco host proprietary communities and offer blogs. And the brokerages pay close attention to what consumers are saying — TradeMonster has implemented over 150 ideas submitted by consumers.

Meanwhile asset management firms are working within the parameters of regulations to blog and allow users to post comments on blogs. Now 85 percent of asset management firms on Twitter use the service to distribute market commentary. TIAA-CREF, which was the first asset manager to invest in social media, rather than layering on top of Facebook, it hosts two separate online communities — and

Michael Ellison, president of Corporate Insight, tells me he predicts that social media investment will eventually have a direct correlation to success. While it's hard to measure the success of investment in social media, companies have no doubt that they


to be there.

Here's how Ellison ranked the smartest banks:

  1. American Express with its "Members Project" and "OPEN Forum."
  2. JP Morgan Chase with "Chase Community Giving, " which has the largest fan base on Facebook in the industry -- 2.55 million fans.
  3. Bank of America with its Small Business Online Community, which has grown 172 percent in the past two years

Questions? Comments?