“They [customers] read Facebook like it’s a nicotine addiction” said Chase Manhattan’s general manager for card services, who was explaining the advantages of an advertising and marketing campaign centered around its Facebook page for the Chase Freedom credit card.  Matt Kane said: “Our reach is much broader because of sharing.”

Banks moving customers towards banking with social media

New York based Chase held a sweepstakes between October 3^rd and October 23^rd, that gave away $500 every hour and a $1 million grand prize.  People who “liked” Chase’s Facebook page for the card were eligible for the prizes. The Facebook campaign launched by Chase is the latest push by a consumer financial institution to use the services of social networking websites to gain visibility, become more engaged with customers, gain new customers, and further, to move its banking system and customers to the online world in full force.  Micro-blogging website Twitter, Foursquare,  Facebook, and other social networking websites also provide banks with huge amounts of data about their customers, and how they spend  money.

Banks believe that online banking is less expensive and more efficient than in person banking at local branches, and customers, more than ever before, are warming to the idea of using social media to do their banking.  A recent survey of more than 5000 consumers, carried out by financial research company Javelin Strategy Research,  found that 12 percent of big U.S. bank customers would probably use social media to review accounts if this service were available.

Javelin founder James Van Dyke said in order for banks to enjoy all the benefits of having their consumers online, people need to do their banking primarily online and be comfortable interacting with their bank the way they engage in other activities using social media. “To get the full return on investment, you need to get people fully online.  You will start to interact with your bank the same way you interact with social media, totally online”, explained Van Dyke.  Banks are working hard to get their customers immersed in doing their banking online, but using social media will help with this push, Mr. Van Dyke said.

Facebook may not, at first, reach as many people as a direct mail campaign said Sarah Phelps with First Annapolis Consulting Inc. but it will help financial institutions by providing information from consumers when they “like” their page and open company profiles of “liked” firms. Phelps, a payments industry principal for First Annapolis, explained:  “You have to get into these channels, and have to start learning how to leverage them. You have to basically leverage your way into new marketing.”
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About David John Walker

Dave has a B.A. in Mathematics, loves writing and reading about the latest developments in technology and social media, and has been working as a freelance writer for five years.