Facebook Users “Like” Community Banks

2/2/2012

By Tom Wessels

The history of the social networking site Facebook is a short one. The site was created only eight years ago, and in that time, the number of Facebook users has jumped to more than 800 million. The number of community banks on Facebook has also grown. In a six-month study of more than 5,300 banks across 31 states, more than 76% of community banks have a presence on Facebook, and, of those, almost 20% have an active page that includes bank information, photos, community events and contests. The chart below shows the total number of banks in the study, those banks that have a presence on Facebook and those banks that "own" their Facebook page. To put this another way, one out of five banks "own" their Facebook page, and therefore, control the content about their bank. The other nearly 3,000 banks on Facebook do not "own" the Facebook page, but merely have a presence. To give an extreme example, last month there were 672 Facebook pages with "Tim Tebow" in the title, but only one of those is the official Tim Tebow Facebook page.

You Like Me...You Really Like Me

Being “liked” on Facebook is a useful way to provide information to current and potential customers. Many banks generate "ilkes" by holding contests -- "Like us for a chance to win an iPad." or by promoting a community service -- "Like us and we will donate $1 to the community food pantry." Not only do activities like these generate buzz and help create a sense of community, but they also help the bank keep in touch with its customer base.Other banks use their Facebook page to conduct recruiting by publicizing job openings. While the value of a "like" for a community banker has not yet been quantified, there does appear to be value. So much so, in fact, that in the last six months, the number of “likes” has grown nearly 25% overall.  

Of the states included in the study (complete list at the end of this article), the most Facebook-active state is Arkansas with an average of 300 “likes” for the month of January. The table below shows the average number of “likes" for the Top 10 states in the study. It also shows the number of banks who "owned" their Facebook page as well as the total number of banks in the state. 

If You Build It...

While it is very easy to create a Facebook page, there are many things a bank needs to consider before jumping on the social networking bandwagon.

"One of the main problems with sites like Facebook is that banks cannot control what people put on their site," said Fran Sponsler, Director of Compliance Services at Fortner, Bayens, Levkulich & Garrison, P.C. "If a bank chooses to be on Facebook, or any of the other social networking sites, it is very important to have someone within the bank monitoring the site." Customers can post sensitive information on a bank's Facebook page and violate their own privacy rights. "It can put banks in a precarious situation," she said.

The ability for a community bank to create and monitor a Facebook page is often a matter of having and assigning resources to the project. The table below shows the banks in this study divided into nine ranges of total assets. The table also shows the average and median number of "likes" in each range and the growth of those numbers over the period of the study. In every asset category, the number of customers and potential customers "liking" bank Facebook sites has grown.

Social networking sites like Facebook continue to grow in popularity, and that growth is impacting community banks as well. These sites can do many positive things for your bank such as providing one more way to disseminate information and keep in touch with your client base. There are some concerns, though. Creating and monitoring a Facebook site will take resources and you could be opening your bank up to potential privacy concerns. Make sure you have a full understanding of both the positives and the negatives before you begin.

The states included in this study were: Alaska, Arizona, Arkansas, Colorado, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming. To see the state-by-state data, click here. 

We would like to know your thoughts on social networking. Please consider participating in Fortner, Bayens, Levkulich & Garrison's 2012 Social Networking Survey by clicking here.