Retail banks continue to resist social media: report

A new report from technology arm of market analyst firm Datamonitor shows that almost two-thirds of retail banks across the world have no plans in place to use social media in any way.

Most retail banks do not view social media as an important tool to engage with customers, putting them in a dangerous position, said Ovum in a statement. Ovum is part of Datamonitor group.

Social media includes Facebook, Twitter and Linkedin among other networking websites.

Currently just 6% of retail banks use social media to deal with customer queries and only a further 1% envisage using it in this way between 2011 and the end of 2012, the statement said.

The break-up in this report from Datamonitor shows that only 14% currently use it for marketing, with a further 12% planning to use it to promote their business by the end of 2012.

"We feel that this attitude from retail banks towards social media is a major issue in an era of aggressive competition. The banks without a social media strategy are being shortsighted and are placing themselves in a dangerous and vulnerable position compared to competitors who have realised that social media can and must play an intrinsic role in their business," Ovum analyst Martha Bennett said.

According to the report, there is a handful of retail banks such as First Direct in the UK, Citi, Bank of America and Wells Fargo in the US and Rabobank in the Netherlands, that have begun to use social media although they are still feeling their way and strategy is very much a work in progress.

"These banks have been justifiably held up as industry leaders for their use of social media. However, there is not universal acceptance that social media is either important or suitable for retail banks," Bennett said.