Most banks still shunning social media as a business tool

Research by market watcher Datamonitor reveals that 60 per cent of the world's retail banks have no plans to use social media in the future.

Analysts warn that this widespread disregard for collaborative tools means many financial institutions risk losing out to more innovative competitors.

"We feel that this attitude towards social media is a major issue in an era of aggressive competition," said Ovum analyst Martha Bennett.

"The banks without a social strategy are being shortsighted and placing themselves in a dangerous and vulnerable position compared with competitors who have realised that social media can and must play an intrinsic role in their business," she added.

Currently only six per cent of retail banks use social media to deal with queries from customers, and only a further one per cent foresee using it in this way between 2011 and 2012.

According to Datamonitor, only a few banks have begun to use social media, and these are still in the early stages of development. First Direct in the UK, Citi, Bank of America and Wells Fargo in the US are among these.

"Consumers are not averse to receiving promotional messages via social media, or using it for customer service enquiries, so a massive opportunity to rebuild the desperately needed confidence in the sector is being ignored," said Bennett.