Social networking’s maturing rapidly, and disintermediation is the cost for banks that don’t recognize the trend.

In new research, Gartner said banks that can gain an understanding of social media, financial social networks and microfinance have a better chance of capturing the business of consumers. Many banks are in early stage deployment of social media, using sites like LinkedIn, Twitter and Facebook as branding, customer service and talent procurement tools.

But Gartner—which defines social banking as a model that makes depositing, lending and the connection between depositors, borrowers and financial institutions transparent— warns that viewing social banking as a “fad” or failing to recognize its potential power now will eventually leave institutions behind the curve. Stessa Cohen, a research director at Gartner, says in the social media model, the bank takes a place among a series of loosely connected financial and social relationships mediated by online social-networking media and tools. Cohen says that risk for banks is the speed of social networks allows new ideas to be established and disseminated in short time frames—too short for laggards to take advantage of emerging opportunities.

Cohen advises banks to crate a social media strategy and ensure they have the technology to implement a social media model. They should then study possible partnerships with social banking providers, rather than building in-house social networks. She also says banks should plan for greater transparency on pricing and service and use this transparency as a competitive tool, encouraging loyalty and expansion of the relationship.

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