One need only to visit a local bank branch to know that social media has taken the banking industry by storm. Wells Fargo ATMs display "We're on Twitter" as a parting thought to customers. Citibank proudly posts the Facebook, Twitter and YouTube logos on its home page. U.S. Bank and SunTrust have switched over to the new Facebook time-line format, complete with branded cover photos.

Yet at a recent conference, Cathy Nash, CEO at Citizens Republic Bancorp, said she was "very reticent today to dive in" to social media for the company. The bank has two FTEs devoted to social media and will not spend a penny more until Nash sees a return on investment on that effort.

Why would any bank embrace social media only halfheartedly?

Some fear they will run afoul of existing and pending regulations. But I believe the more compelling answer is that many banks are unaware of the immense business opportunity that social media presents across the enterprise in many business units and roles.

Marketing: U.S. Bank asks customers to "like" its Facebook page, to "learn how to stay on top of your savings with S.T.A.R.T. (Savings Today and Rewards Tomorrow)." The S.T.A.R.T. program not only helps consumers put money away through automatic transfers to a savings account, but also benefits the bank by having more consumers establish long-term accounts with more assets at U.S. Bank.

In its Facebook promotions for its Freedom Card, Chase asks consumers to answer a question and enter personal information for a chance to win a $1,000 gift card for grocery shopping. Consumers' self-reported information generates new leads for the credit card division. Wells Fargo also gets it right with a recent post asking consumers, "Does retirement planning stress you out? You're not alone. The good news is saving for retirement just got a lot easier ... you can make it automatic!" When consumers engage, they are taken to a page where they can open a retirement account online.

Corporate communications and public relations can be enhanced with social media. SunTrust uses its Facebook page to promote its "Wall of Service," a digital place where employees are honored for community service with organizations like the Susan B. Anthony Recovery Center or the United Way. Such an application fosters a sense of community for current employees and humanizes the SunTrust brand. Consumers are either compelled to return to the page or persuaded to allow SunTrust's posts to remain in their news feeds.

Likewise, social media can be valuable in mitigating and managing bad press. Take the protest launched against Bank of America last October for imposing a $5 debit card fee on customers or the social fiascoes that Citibank and PNC experienced when their online sites went down. Addressing PR risks in the form in which they catch fire is an effective way to contain trouble that could cost the bank customers, investors and consulting fees to bandage a tarnished reputation.

Customer service: Quick and authentic customer service on Twitter can provide value through operational efficiency, a point illustrated by Citi's hiring former Comcast executive Frank Eliason. Give customers a place to be heard and they will put more money in their checking and savings accounts. Answer their questions about checking and savings accounts, and they will be more likely to open a credit card or take out a home mortgage with the bank. The costs per customer are minuscule compared with other modes of communication. For every happy customer you serve via Twitter or Facebook, many more see your reply and respond favorably. And while you serve customers, you learn valuable information about your customer base - their preferences and behaviors based on where they live, income level, cultural affiliations and other key demographics.

Sales: This is the No. 1 underutilized group with respect to social media. Sales teams should be prospecting in social media. LinkedIn boasts a more affluent and educated audience than TheWall Street Journal. In the private banking and wealth management lines of business, sales reps need to use it as a prospecting tool. Likewise, the LinkedIn profile is a branded point of contact for inbound leads to get in touch with your people.

Market research: On the institutional side, social media presents another tool for banking analysts to research market trends, get timely market news, and better analyze the exposures and strengths of the companies the bank merges with, finances or buys.

Human resources: Studies show that the new era of financial professionals have grown up with Facebook and are more likely to apply, interview and accept offers with a company that exhibits innovation and embraces the tools that work best for them. JPMorgan Chase uses Facebook to attract undergraduate and graduate students to internships and full-time opportunities on its Careers application. Banks can also purchase Facebook Ads targeting profiles of ideal candidates - for example, undergraduate economics majors at top-10 universities.

Employee satisfaction and retention: Public or private LinkedIn and Facebook groups, with proper privacy controls built in, are ripe forums for internal collaboration and building a sense of community among bank employees. Bank of America does a nice job of this and has recently created subgroups for employees to have richer and more tailored discussions.

This column originally appeared at Bank Technology News.

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