Inside Facebook

As the world of banking and financial services has become digital, electronic banking has become common practice. Mobile banking is also becoming increasingly popular, particularly in the developing world. But, with most of their customers on social networking sites, how much are banks leveraging social platforms to reach their customers? Apparently, not much.

Let’s be honest. How many Facebook users are fans of the financial institutions that facilitate their financial transactions every day? And if you could manage money through a Facebook application, would you? The truth is that for many industries – technology, entertainment, consumer products, and fashion – engaging with the over 200 million users (and 60 million Americans) active on Facebook is a no-brainer, but other industries are a bit more cautious.

Facebook and banks are not friends, according to Bank Technology News. In the piece, senior analysts at financial consultancies share: “I’m not aware of any bank that’s been successful with Facebook,” and “Banks do not need a social media strategy, they need a business strategy.”

And who could blame them? Both statements are valid. Financial institutions have serious challenges to worry about these days, and consumers are sensitive about online privacy and security more than ever. Check to see if your bank has a Facebook Page, how many fans it has, and how engaging the content is.

Bank of America’s Facebook Page:

And while there are logical limitations to banks and their social media strategies, there may be room to offer more functional services to customers on Facebook. MyMoney is a Facebook application created by Fiserv that lets you use your financial institution to view balances, transfer money, etc. without leaving Facebook. It currently has only a few active users, but as Facebook continues to roll out its payment system, demand for similar applications could increase. Just when you’re about to purchase those Facebook credits, you may realize that you need some extra dollars in your checking account.

If financial institutions can continue to innovate in ways that protect users’ security and privacy, we could see a stronger business case for more banks and better financial services making their way on to Facebook in more ways than just marketing.