Many brands have been twittering, facebooking and blogging for a few years now, with 26% of the top 1000 brands having a Facebook page and 19% chatting on Twitter. However, out of over 13,000 banks around the world only 5% are regaling their facebook fans with interesting bank stories and only 3% have something to say on Twitter.

According to the Pew Internet and American Life Project, 46% of American adult internet users had a social networking profile in 2009, compared to 8% in 2005. Asia is somewhat outside of the ‘it’ crowd though with only 1.9% of Asian banks making up those financial institutions on Twitter, compared to a dominating 72.2% US presence, according to the Asian head of research firm Celent. It does not take a banking whizz kid to do the math.

With Twitter having just launched a business guide emphasising the instant market research and marketing value of the site, it was Wells-Fargo who lead the way with the first corporate blog in 2005. Some banks are reaching out virtually in a virtual world as well. Six of the ten banks in Second Life (SL), a virtual community of 4 million members, are the real deal, using SL as real marketing in an unreal world. ING Bank went one cyberspace step further, creating a virtual Holland to get feedback from virtual inhabitants, only to pull the plug a year later, proving there is no secret formula to Social Networking success.

Bank of America has created its own Small Business Online Community. The trend is not just to join existing platforms but create new ones too, with big brand names such as Coca-cola and Reebok already having gone in that direction. Community users visit a site nine times more often than non-community users, with four times as many page views according to business consultancy gurus McKinsey.

Average Joe lingo, real life stories and company Facbook posters answering niggling queries, bridge the gap to create the feel good glow. Banks such as Bank of America though have also been roughed up in the online playground with anti-company sentiment posted too. The Inter-American Development Bank recently uploaded a video on You Tube with their President expressing condolences about Haiti and talking about redirecting resources to help. HSBC has bit into Social Media with sharp teeth. Their edgy You Tube ads such as ‘Bad Boy’ take the stiff and nerdy bank image and turn it into Hollywood action hero rebel.

The driving force for banks engaged in Social Media is not just the technology per se but the fast moving Gen Y who are not so much the next generation but the net generation.

Resources: Mashable, McKinsey, Pew Internet and American Life Project, Celent