Financial institutions turn to social networks

Socializing with your bank has become more involved than simply chatting with the teller as you wait for your deposit to process.

Major banks in the U.S. are turning to social networks to draw in customers, handle concerns and improve image, and some are going to great lengths to do it.

"Social media is going to become an increasingly important interactive communications channel over time as the consumers and small businesses become more comfortable and literate with social media and as banks improve the ease of use," Les Dinkin, managing director at consulting firm Novantas LLC, told the Wall Street Journal.

J.P. Morgan Chase & Co. launched a campaign on its Facebook page to advertise its Chase Freedom credit card, which included a sweepstakes that ended on Sunday. Users who joined the New York bank’s page through the “like” function, or an expression of interest broadcasted to their friends, were entered to win $1 million or $500 given out each hour from Oct. 3 to Oct. 23, according to the Wall Street Journal.

The article also reported that American Express Co. launched a Facebook application that displays unique offerings based on a user’s “likes.” Capital One Financial Corp. has been integrated into games played through Facebook, such as Zynga Inc.’s FarmVille, and Bank of America Corp. uses Twitter to address customer concerns.

The mega banks are not the only ones tapping into the social resources.

Zions Bancorporation not only has a Facebook page, but also is using social media to host a reality show called “Cheapster.” The show pits 10 contestants against each other in challenges to see who is the most frugal. Cheapster’s Facebook page is at 1,017 likes, while the Zions Bank’s page has 2,267.

The benefits of social media could help banks improve their images.

Mashable recently did a series on Facebook marketing, including an article on best practices for financial institutions. The article suggests hosting contests, offering career advice and, of course, being cool.

“Banks aren’t really the most trusted institutions right now,” Frank Eliason, Citigroup Inc.’s senior vice president of social media told Mashable. “We look to social media to try to change that perception, and we try to do it in a very human way.”