Banks using social media to engage, retain customers

Banks using social media to engage, retain customers

Many financial institutions are now offering new, convenient services through social media platforms to attract new customers and increase customer loyalty in banking, according to Bankrate.com.

The source says Vantage Credit Union recently launched its tweetMyMoney product on Twitter. By texting the credit union, customers are able to access their account balances, transfer money or keep an eye on any held or cleared checks. The bank then uses Twitter's direct message feature to send back a reply so the tweet isn't posted to the entire community.

The bank has also implemented new security features by adding authentication codes at the end of messages to help prevent fraud. "It's no different than the kind of information being transmitted on ATM receipts," Mark Schwanhausser, a senior analyst at Javelin Research, told the source. "It's not something that would be easily picked up by someone else and exploited."

Analysts also told the source that the small number of customers using the service reduces security concerns, but if the program were expanded, security risks would also increase.

Bankrate.com says technology company Fiserv has also developed a banking application for Facebook called MyMoney. It allows bank customers to review history and account balances, and even apply for a loan. "People spend 25 minutes a day on Facebook, and this allows them to access information from the site they are already in," Scott Bowen, manager of business development at Fiserv, told Bankrate.com

Other banks, like Addison Avenue Federal Credit Union, has used social media networks to help educate consumers and improve customer service. The source says a series of group discussions run by the bank address various topics such as improvements the company could make and suggestions about how to pay off debt.

The credit union is also coming out with an iPhone online banking application in the coming months.

Bankrate.com says that larger banks like Wells Fargo are also using social media to help improve customer service. The San Francisco branch says that it runs a Twitter feed, allowing customers to ask bank employees real-time questions. The branch's vice president told the source that it allows them to listen to customer needs and resolve any potential issues quickly and effectively.

Recent studies by both Omniture and Gartner have shown an increasing trend of companies across the business spectrum extending into social media for marketing and customer service. Omniture's study found that nearly 70 percent of companies were using social media technology in their marketing efforts.

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