The social media landscape is still a jungle for many financial institutions, but a few have cut a clear path for themselves.

Vantage Credit Union in St. Louis, for example, said it has improved customer engagement markedly by allowing members to access Facebook and Twitter from within online banking; those customers who do so spend twice as much time on the credit union's website as the users who do not.

The much larger SunTrust Banks Inc. started its own social media program about a year ago. Since then, SunTrust said, it has had conversations with about 15,000 customers on Facebook and 1,500 on Twitter. (SunTrust has 5 million customers.)

A survey Fiserv Inc. released in November shows the potential of a strong social media strategy. It polled 3,000 online consumers and found 84% were using social media, and 11% connected to their financial institutions this way. Consumers who connected to their banks over social media had 5.6 products, compared with 4.3 for those who did not.

Yet very few banks have invested in social media, according to a November report by Aite Group, which studied 166 financial services companies in the U.S. and Europe. Sixty percent of the companies considered themselves novices at social media, and only 8% said they have an advanced knowledge of the medium. Thirty percent devoted no funding at all to social media campaigns. More than half of banks said their funding was too small to measure.

But this picture is expected to change dramatically by 2012, when 90% of companies surveyed said they will have dedicated funding in place for social media.

Vantage's strategy grew out of a service it rolled out in 2009, Tweet My Money. That service let members send a message through Twitter to the credit union, which in turn would tweet back the user's account balance as a direct message viewable only by the account holder.

After that, "we basically integrated many social media applications into online banking. So while customers are paying bills, if they want to check their status on Facebook they can do this in the online channel," said Cameron Minges, executive vice president for information technology at Vantage.

Vantage, which has assets of $680 million and 103,000 members, half of whom bank online, also created an online and mobile banking suite for 18-to-25-year-olds, which it launched in June. It's called Not Your Mama's Account, and it integrates social media and personal financial management tools. Users can check balances and track spending while updating their status on Facebook. The account also offers users electronic coupons giving them discounts on various goods and services, which they can share with friends over Facebook and Twitter.

The account "was tailor-designed for this age market," Minges said.

He said 10% of the Internet traffic accessing the credit union's online services comes from mobile devices to these accounts, which he said is twice the industry average for mobile access to financial institutions' websites. So far, the credit union has 2,300 such accounts.

"The 18-to-25-year-old market clearly told us that they want to interact with us online, and they are not interested in branch infrastructure," Minges said. Some of the account's features, such as not penalizing for bounced checks only once a year, are money losers for the credit union but may have a more lasting impact on young users, he said. "We are not going to make money on them right now, but in the future," Minges said. "When they graduate from college and want a mortgage, and all the other services we offer, we hope we will be the first one they consider."

SunTrust's social media campaign has two components, lumped under its Live Solid, Bank Solid branding initiative. At, SunTrust uses Twitter and Facebook to try to engage customers in a conversation about general financial topics, such as how to pay children an allowance or what to do if you find you're dating someone with a lot of debt.

The second part, which fits under its Bank Solid label, involves SunTrust representatives monitoring the online conversation customers are having about the bank on social media, interceding where necessary to handle customer service issues or complaints. For this program, SunTrust sometimes steers customers out of public forums to one-on-one communication with the bank to protect any account details that might need to be shared for SunTrust to address customers' issues.

SunTrust also created a new chain of command to handle account requests made over social media. When questions come in through Facebook or Twitter, three dedicated social media specialists channel them to about 40 "stakeholders" in various business units at the bank who are directed to answer, regardless of the type of account the consumer has questions about.

"It is a savvier client who thinks that if they engage with us publicly and have this conversation in this open forum we will hear what they have to say," said Bianca Buckridee, SunTrust's social media engagement manager.

Buckridee said the program is too new to gauge whether it has actually led to more accounts or more sales of products, though she said customer input has led SunTrust to think about certain products in new ways that may change certain offerings, such as mobile banking. She did not share any details.

"When you demonstrate the willingness to listen to what consumers have to say, it builds loyalty, and when you build loyalty, you know the products will come," Buckridee said.

It's hard to tell whether social media was the cause or the effect for customers with more accounts. It's possible that customers who already had more accounts were later drawn to engage with their banks over social media. "It is more likely that someone on a social network is using online banking," said Nicole Sturgill, a research director at TowerGroup. "But it would be more difficult at this point to show that those same people have more bank products than those who do not connect with the bank this way."

Ron Shevlin, a senior analyst at Aite, said a minority of consumers use social media to connect with their banks, and they have probably been using it for a short time, perhaps less than a year. "Any change in retention and account ownership or account balances can't possibly be big enough to measure so soon," Shevlin said. He said that Aite's 2009 survey of Gen Y members found that only 2% followed their banks on Twitter.

Others said use of social media was comparable to the early days of the Web, when a small percentage of early adopters, primarily the wealthy, paid bills and accessed accounts online. "If you go about social media in the right way, you will find some positive business results," said Cathy Graeber, founder of the consulting and research firm Swimming Upstream. "But you can count on one hand who can quantify this."

This story has been reprinted with permission from American Banker.

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