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Should you social network with your bank?

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Facebook and Twitter aren’t only for socializing or getting the word out in 140 characters or fewer. You can do your banking, too, by checking your balance, transferring money, getting customer service help and applying for a loan, all without leaving the social networks.

Efforts are in the early stages, but a handful of financial institutions, including Vantage Credit Union, Addison Avenue Federal Credit Union and Wells Fargo are making it easier for customers to conduct banking wherever they may be, including in a social network. Some are using the online communities to improve customer service while others let customers conduct transactions.

“There’ve been a couple of examples where we’ve seen people talking about us, recommending us or complaining about something and we have been able to jump into the conversation and help a member out,” says Matt Fagala, online products and communities manager at Vantage Credit Union in St. Louis. “Some of us here at the credit union are on those sites 24/7 or at least late at night. It may be times business is closed but you’ll still get answers to your question.”

Checking balances in 140 characters

While 20-somethings are the primary users of social networks including Facebook and Twitter, the fastest growing segment, according to Javelin Strategy & Research, is 35- to 44-year-olds.

The financial institutions have an uphill battle in convincing wary consumers that conducting financial transactions on a social network is safe and secure, but Mark Schwanhausser, a senior analyst at Javelin Research says security isn’t too much of a concern at this stage of the game. “It’s no different than the kind of information being transmitted on ATM receipts,” says Schwanhausser. “It’s not something that would be easily picked up by someone else and exploited.” Because relatively few people are using the services, it’s not likely to attract the attention of criminals yet. “If it catches on, the security risk increases,” he says.

Last year Vantage Credit Union launched its tweetMyMoney product, betting that customers want to conduct banking while on Twitter. The service lets customers on Twitter text the credit union to get information on their account such as balance, holds, cleared checks and even transfer money between accounts. Vantage Credit Union uses the Twitter’s Direct Message feature to return the account information, which means it doesn’t go out to the whole Twitter community. The credit union added an extra layer of security by incorporating authentication codes at the end of each message, says Fagala.

“It’s just any easy way to get information,” says Fagala of tweetMyMoney. “If you want a quick look at your account or quickly move money it takes 30 seconds by sending a text message.”

In April 2008, the technology company Fiserv, in Brookfield, Wis., came out with its MyMoney application, which lets banks offer customers a way to view account balances, review history, transfer money between accounts and even apply for loans while logged in to Facebook. Like Vantage Credit Union, Fiserv says it’s a convenience that banks can now offer its customers. “People spend 25 minutes a day on Facebook, and this allows them to access information from the site they are already in,” says Scott Bowen, manager of business development at Fiserv.

Social networks educate, placate

Addison Avenue Federal Credit Union, in Palo Alto, Calif., is also a user of social networks, using Facebook, Twitter and discussion boards to educate customers, improve customer service and to reach out in the case of an emergency. The credit union isn’t using it as a way to conduct banking, but it is coming out with a banking application in the coming months for the iPhone that will enable you to conduct banking transactions, find ATMs and branches from your iPhone. The application, which will be free, will include feeds from Twitter and the ability to read and participate in discussion groups.

Currently Addison Avenue Federal Credit Union hosts a series of group discussions forums on its website, focusing on everything from how to pay off debt to suggestions to make the credit union better. The credit union also uses Facebook and Twitter as a way to contact members in the case of an emergency, which was the case this past February. A power outage left the credit union without phones so it turned to Facebook and Twitter to get the word out.

Credit unions and community banks aren’t the only ones dabbling in social networking. Large banks including Wells Fargo of San Francisco are using social networks in part to improve customer service.

Wells Fargo’s Twitter feed lets customers ask questions in real time, which according to Kimarie Matthews, vice president, customer advocacy and loyalty, enables the bank to be on the ground listening and responding to customer needs and in some cases resolving issues within minutes of it happening.

“Social networks are a place people are talking and engaging in,” says Matthews. “It’s another place that we are listening and trying to help.”

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