Why It's Important: Almost every industry has seen the influence of social networking, and capital markets is no different. Traders use social networks to share trading information (such as which ECN is having problems), investors use them to share tips and companies are creating internal social networks to increase employee productivity. In other words, social networking in financial services is useful and it's here to stay. "Social networking is going to be here for the long term, and it is important to stay engaged there," says Stephen Ehrlich, CEO of Lightspeed Financial, which runs Lightspeed Spotlight, a social network for active trading customers of Lightspeed Trading.

Where the Industry Is Now: During the past two or three years, financial firms of all stripes -- exchanges, brokers, industry associations and vendors -- have experimented with social networking. Many are using it internally for collaboration or disseminating company information to employees. SWIFT, the global financial transaction consortium, launched SWIFTcommunity.net in 2007 and has almost 12,000 users. On Twitter, where most organizations have some sort of presence, CME Group Twitter feed has more than 766,000 followers and more than 5,000 tweets. A few other independent sites, such as Elite Trader, also offer participants a place to exchange information and connect with like-minded users. Similar to Lightspeed, Charles Schwab also hosts a proprietary active trader social network for clients. TradeKing has one of the most robust social networks, with 175,000 account holders. On most proprietary social networks, customers can share ideas and even criticize the provider. "Many companies are fearful of how social networking allows customers to speak their minds openly," says Lightspeed's Ehrlich. "Sometimes you don't like what they have to say about you, but the criticism is often the most valuable information."

Focus in 2010: Across the business landscape in 2009, everyone was asking about the ROI provided by social networking. As 2010 approaches the question still hasn't been answered, and it probably won't be for some time. "There is no money to be made at this point," says Marc DeCastro, research manager at advisory firm Financial Insights. "Firms are still trying to figure out if social networking is about marketing, client support, customer support or something else."

So why should a financial services organization invest in social networking? For starters, it is considered a sign that the company has modern technology. "Millenials are completely comfortable interacting with a financial institution online or through a social network," DeCastro continues. "Even the insurance industry has done a lot with social networking. Banks, in particular, will look to refresh their platforms with social networking-types of interactions, as well as Web 2.0 tools," such as the functionality in Mint.com. "That is what is going to attract and retain clients."

Determining who will use a social network will also be a challenge in 2010. It's no secret that certain types of users are more likely to use a social network, according to Andrew Carrier, head of marketing communications and banking at SWIFT. "We have some very high-level people who attend our SIBOS conference, but they may not be the ones who are most likely to use our [social] network," Carrier says. "There are some technical people who are more comfortable using social media sites to solve problems and find information."

Still, engagement can be a concern for some firms who are investing in social networking. SWIFTcommunity.net, with around 12,000 users, only had 1,300 people log on in October 2009, with 55 blog posts, 53 forum posts and 93 comments in total, Carrier reports. "We have a lot of users, but engagement is a challenge," he concedes. "In 2010 I expect to see engagement increase. Social networking is not about having a place for SWIFT to push out its stories; it's about having a place where the community can engage. We didn't build it for us. It's built for the users." Lightspeed's social network has about 20 percent of its clients registered for the social network, says CEO Ehrlich.

Industry Leaders: TradeKing, Lightspeed, Charles Schwab, E-Trade, Scottrade, Elite Trader and SWIFT, to name a few.

Technology Providers: Some companies build their own social networks, but others rely on technology from providers such as Small World Labs, Elgg.org, KickApps, Groupsite and CrowdVine.

Price Tag: Varies depending on the commitment. For instance, after investing in the development of a platform based on technology from Small World Labs, Lightspeed added one full-time employee dedicated to maintaining and improving its social network.