When people use social networking sites, they reveal information about themselves -- what they like, what they dislike, their hopes and aspirations — that can be used for marketing.
"Facebook is a cheap place to advertise, and people on Facebook will tell you about everything — their favorite TV shows, where they're going, everything," Barry says. "We can see what our followers are watching, and tell our marketing department to advertise during 'Dancing with the Stars,' for example."
First Mariner is also finding Pinterest useful for obtaining information. Pinterest lets people post photos about a certain topic, and view similar photo collections of other people. These photos can suggest a person who's interested in home improvement, travel, or purchasing a car, for example. By adopting Pinterest as a social network option for consumers, the bank is including more lifestyle and goal-oriented content into its social mix, and has found it's able to attract younger consumers by giving them a venue to post photos that interest them. "We are pushing more content that's related to people's lives," Barry says.
4. Use social media data to help with credit decisions
Ken Rees, CEO of Think Finance, an alternative lender, says that much like observing behavior during an in-person visit to an office, social networking offers an opportunity to spot behavior that can inform a broad picture of credit risk. While it's rare for people to discuss why they need an installment loan or how they're having a tough time paying bills, there are still tendencies that can be gleaned by viewing other activities on social networking sites.
Rees, who stresses that social networking aids traditional underwriting, rather than replacing it, says the use of social media in credit decisionmaking is reliant on an analysis of how people are using social networks.
"Not many people talk about paying bills online, but they do tweet about a car breaking down. That can be an opportunity to reach out to a customer for a loan, or to be aware that they may have a need," Rees says.
Rees says one simple creditworthiness check is finding out if a borrower actually has a social media footprint. Facebook and Twitter have become so ubiquitous that it can set off a red flag if a person doesn't have an account. "It's better to have an online ID. Not having one is like walking into a brick and mortar store without a driver's license," he says.
5. Incorporate social media in reward and loyalty programs
Deloitte's Berini says social platforms are also a popular venue for games. This can be useful in delivering merchant rewards and other loyalty products.
"Games are a way for customers to feel they are building toward rewards that aren't necessarily in the credit card context, but are tied to a certain outcome," Berini says.
First Mariner's Barry says the bank is looking at gaming as a way to increase use of social networking, by allowing players to connect with each other via a social networking site operated by the bank. "The gaming idea is for younger users, people in the 18 to 25 year old range. It's a different way to advertise and get to customers," Barry says.