Earlier this week, I received an e-mail pointing to an interesting blogpost about the adoption of social media in finance (or rather, the lack thereof). As I drafted a response with some further thoughts on the idea, I started wondering: how far along are financial institutions really on the social media adoption curve ?

The answer is – unfortunately – not very far at all. In spite of the fact that social media are becoming the vehicle of choice to talk about anything from Doctor Who to Conde Nast closing down Gourmet magazine, most financial institutions seems to be quite happy to ignore the entire issue – at their own peril.

It’s time to join the party, and become part of the conversation. According to Social Media Today, “Your workers are talking about you in closed Facebook groups designed to keep you out so they can talk about you in peace. Your customers are emailing, Tweeting, Facebooking, and that old standby – calling – their friends about their experience with your brand. You don’t have control. You might as well join the conversation. At least that way you can influence what is being said.”

Consider the following:

• News media are embracing the power of social media like crazy – Twitterholic.com ranks CNN in 4th, the NY Times in 19th and Time magazine in 29th place in terms of followers. The collective number of followers is just over 6.3 million, meaning it’s time for everyone to stop pretending Twitter is only for Ashton Kutcher and his band of teenage girl mercenaries;
• There is heated online debate impacting banks‘ reputation, from which they seem to be entirely absent – Want a glimpse of what could happen ? Just talk to AT&T, who are continuously ranked amongst the top in Twitter’s trending topics, and the news is not good at all;
• Several banks that seem to be catching on seem to miss the point entirely – consider @hsbc.com on Twitter – with seven eye-catching posts, all written in seven minutes on August 25th – not exactly stellar performance from “the world’s local bank”;
• This is no time for sticking your head in the sand and hoping it will all go away either – social media is here to stay, and in spite of the fear some corporations have to join the debate, good things can happen. Just ask Starbucks, who succesfully used social media monitoring to survive a brand attack.

The good news is, some role models are already out there and making it happen. Good old consumer favourite ING Direct has built a solid following on Twitter by providing value-added content that supports their brand. According to ING Direct COO Jim Kelly, “Twitter, Facebook, these are our branches. These are the ways we’re having the conversations that people in an office or a branch might have with customers on a daily basis.”

ING Direct started using social media about a year ago as a way to communicate with customers who had worries about the economy and finances. As a virtual bank, the brand was able to use social networks to engage customers in conversations about financial issues and topics. Earlier this year, the company hosted tweetups, connecting with consumers off-line at the bank’s café in New York.

Handling social media internally, the brand has a presence on Twitter, YouTube, and Facebook. It also offers savings widgets on iGoogle, reviews of its cafés on Yelp, and financial advice on a “We the Savers” blog.

In “Reality Check: Social Media Survey 2009”, PR Week US asked participants how they felt social media would continue to shape the future of brands:

“The majority of respondents say that social media will have more of an impact on the following aspects over the next year or two: connection to customers (79%); building company or brand awareness (76%); generating sales and revenue (63%); increasing or maintaining market share (62%); managing corporate reputation (61%); and managing stakeholder opinions of the company or its brands (48%).”

It is a clear and verifiable fact that social media is becoming increasingly important, and many large (and small) businesses are successfully harnessing its power to improve the dialogue with their customers. There is a narrow window of opportunity for those financial institutions that choose to be pioneers in this space – providing they get it right.

Those of you that are willing to get started may find some useful ideas in one of my previous blogposts.

As always, I look forward to your comments, ideas, suggestions or observations …