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Exchanges, Banks and Brokerages Start Tweeting

Exchanges, brokerages, banks and regulators are all jumping on the Twitter bandwagon and exploring new ways to reach out to their customers -- and sometimes their foe.

Exchanges, brokerages, banks and regulators are all jumping on the Twitter bandwagon and exploring new ways to reach out to their customers -- and sometimes their foe.

Twitter has seen a surge in activity in the last couple of months. The site received a huge boost in popularity thanks to a host of high-profile celebrity endorsements -- including from Demi Moore, Ashton Kutcher and Oprah Winfrey.

Twitter was also much hyped in the mainstream press after hostages in the Mumbai terrorist attacks tweeted to family members and friends about the action that was unfolding in front of their eyes, and when it became the first to break news about Captain Sully's emergency landing on the Hudson river in January.

Most recently, reports have flooded the mainstream press about hundreds of thousands of people using the site to tweet about the swine flu.

The social networking site now counts around 14 million users. (These include Wall Street & Technology (wallstreettech) and its editors -- Melanie Rodier (mrodier), Greg MacSweeney (gmacsweeney), Penny Crosman (pennycrosman) and Ivy Schmerken (ischmerken).

Corporate Insight, a New York-based market research and consulted firm, first studied financial firms' use of Twitter last October.

"At the time, we thought it wasn't clear how firms were going to use it, but a lot of them had registered a profile. But now there's been a major uptake in activity," says James McGovern, VP of consulting services at Corporate Insight.

"Twitter has become a lot more popular. Celebrities have embraced it. So it's given incentives to financial firms to explore ways to use it," he adds.

CME Group has emerged as one of Twitters' leaders among the financial industry (twitter.com/CMEGroup) , counting 238,444 followers -- impressive even by mainstream standards. (By way of comparison, both CNN and pop culture icon Ashton Kutcher recently counted 1 million).

The exchange was one of the financial industry's earliest adopters of Twitter, and has been on the platform since September 2008 (It launched its profile during its high-profile global financial leadership conference in Naples, Fl).

"We are looking at it as another opportunity from a standpoint of reaching out and talking to customers, as well as a branding opportunity for us to talk about the things we feel are important for the exchange to talk about, from a regulatory standpoint as well as from a broader economy standpoint," says Allan Schoenberg, Director, Corporate Communications at CME Group.

"What makes it a unique tool for us is that we cover every asset class. Because we're so diverse, it's a great opportunity for us to go over various news trends and issues, and talk to various customers," he adds.

Overall, Schonenberg says he has found that Twitter can improve customer loyalty as well as foster advocacy for things that matter to the exchange. "We're also leveraging it to cross-promote other things we're doing in social media; we've got a Facebook fan page and a LinkedIn page."

In recent months, Nasdaq and NYSE Euronext and other exchanges have also joined Twitter. The SEC is now also using the platform in a bid to revamp its image, most recently sorely damaged by the Madoff fraud scandal.

Twitter and other social networking sites are reshaping the way firms communicate with their customers, McGovern says. "It allows firms to listen to their customers, to monitor what people are saying, good and bad. And it allows them to address complaints they have. They can interact with their customers in a much more personal, proactive way."

Corporate Insight says firms such as Wells Fargo, Wachovia, Bank of America and the brokerage Scottrade (twitter.com/scottrade) are using Twitter to comment on news stories about their own firm. They are also posting links to direct people's attention to news items. Others are using it to promote their own products.

"But the most interesting use is to monitor what people are saying about a firm, and to respond," he says, concurring with CME Group's Schoenberg.

McGovern points out that among banks and brokerages, Wells Fargo and Bank of America stand out in their use of Twitter in this way, actively using it as a platform to answer consumer questions and address their complaints -- even setting up calls with customer service to ensure the user's issue is handled well," he adds.

Both Wells Fargo (twitter.com/ask_wellsfargo) and Bank of America (twitter.com/BofA_help) only started using Twitter recently. They now count 1,092 followers and 1,810 followers respectively.

Wachovia, which has 3,292 followers (twitter.com/Wachovia) , also uses the platform to respond to comments from Twitter users. But it also used it to talk about its merger with Wells Fargo when it was announced. "It was doing its best to provide a positive take on the merger and talk about its benefits," says McGovern.

Scottrade is also using the platform to respond to users' questions and complaints. Some examples of recent posts include: @billybobseq47 - I am sorry to hear you aren't happy. Is there something I can help you with? Please DM me your concerns. And: " @ro_gupta - We don't own a helicopter, it's just part of our marketing campaign!

Overall, brokerages have been slower to adopt Twitter compared to other financial firms -- mainly due to compliance challenges -- although like others, they are gradually jumping into the fray.

"They are supposed to preserve all communications and are held to a certain legal standard," McGovern explains.

"But Twitter is very hot right now, and it does provide a pretty low risk for firms to nip problems in the bud," he says .

Reader Comments:

By Graeme Thickins

So, how are these regulated firms archiving all their tweets for compliance purposes? And that would also have to include, I would submit, all the so-called "@" replies they receive, their to and from direct messages ("DMs"), and the retweets they get from others ("RTs").

Twitter does not provide that archiving functionality, nor have I ever become aware of a third-party app that effectively does that -- and I've been on Twitter for more more than a year now (with 4000+ updates/tweets). Try scrolling back through all your previous tweets sometime -- last I did that, I could only go back about ten pages. The rest are in some black hole somewhere.

I used to be in the email-archiving business, so this question is of particular interest to me. I'm well aware of the regs for preserving all electronic communications, including email and IM. It would stand to reason that anyone in an SEC-regulated business would be understandably leery about using Twitter until they know how everything is archived -- all the things they that they and their employees and customers say on this micro-messaging service. I keep waiting for someone to clear the air on this subject.

(Hint-hint: a definite follow-up story that you folks at Wall Street & Technology need to do!)

Graeme Thickins

Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio

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