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It’s commonly held wisdom that once you choose a bank, you stick with it. Your bank moves with you through life’s stages - offering you everything from student loans, credit cards, personal loans, mortgages, investment loans - the whole kit and caboodle.

Banks and financial services institutions are fully aware that the lifetime value of a penniless student can be substantial, and naturally there’s fierce competition.

Of course the financial services industry has been highly sophisticated in targeting this customer segment developing a range of products and services to suit their needs.

But marketing to these students is a whole new ball game. They don’t use the media we’ve always used, they don’t want to be interrupted and they are turned off by advertising.

Today’s students have grown up with technology, and have a preference for blogs, podcasts, wikis and Instant Messaging. They are extremely high users of social networking sites like Facebook and MySpace.

They depend on referrals from credible sources like friends and family or even trusted brands and blogs.

It’s commonly held wisdom that once you choose a bank, you stick with it. Your bank moves with you through life’s stages - offering you everything from student loans, credit cards, personal loans, mortgages, investment loans - the whole kit and caboodle.

Banks and financial services institutions are fully aware that the lifetime value of a penniless student can be substantial, and naturally there’s fierce competition.

Of course the financial services industry has been highly sophisticated in targeting this customer segment developing a range of products and services to suit their needs.

But marketing to these students is a whole new ball game. They don’t use the media we’ve always used, they don’t want to be interrupted and they are turned off by advertising.

Today’s students have grown up with technology, and have a preference for blogs, podcasts, wikis and Instant Messaging. They are extremely high users of social networking sites like Facebook and MySpace.

They depend on referrals from credible sources like friends and family or even trusted brands and blogs.

Furthermore, traditional banking brands are having to compete with a slew of online financial services sites that embody the trends, technologies and connections that have been adopted by the 18-25 year old demographic.

New entrants like p2p lending sites, and online banks are exploiting new distribution channels to win customers with better products, rates and service.

New financial channels like mobile phones and the Web and technologies like chat and SMS continue to change consumers’ financial behaviour, encouraging cross-channel interactions.

Financial services marketers have to move into the online places that young people inhabit. Using social networks is all about making your content accessible to people online. And this means above and beyond your website. Which is of course is quite a mindset shift - your online content strategy needs to embrace the sites where your customers enjoy spending time.

And you’ve got to provide them with relevant information and speak to them in a way that’s respectful and in tune with who they are and how they communicate on and offline.

No wonder then that banks are starting to move into Facebook.

Currently most of Facebook’s revenue comes from banner ads placed by Microsoft but it also directly sells more innovative marketing concepts like sponsored profiles, and user groups as well as providing companies with a platform to create tools and services. Last year, Chase was well ahead of the pack when it negotiated a one-year exclusive deal on Facebook to market its credit cards to students. More recently TD Canada Trust launched its own Facebook user group called the TD Money Lounge to communicate with students, and another Canadian bank, the Royal Bank of Canada has its RBC Campus Connection.

Backing up this activity, some interesting data from Hitwise showed that Facebook currently ranks 20th in terms of delivering traffic to retail websites including banks and that four percent of people leave Facebook to go to an online retail site.

So the challenge for banks on Facebook is to ensure that the experience there complements and reinforces the brand.

This hasn’t quite worked to plan for HSBC. Students in the UK recently bandied together, forming a group on Facebook called “Stop the Great HSBC Graduate Rip-Off”. More than 4000 students voiced their anger over HSBC starting to charge them for overdrafts on their student loans. The group won wide publicity with coverage on and offline in all the major media outlets manifesting a PR disaster for HSBC. Such was the backlash, HSBC abandoned its plans.

There’s more to social media than Facebook

Although the Royal Bank of Canada has already formed a user group on Facebook, their social media strategy has evolved far beyond just that.

Indeed Canada’s leading retail bank, recently posted an ad on Craigslist. It states: “Students? Tired of mopping floors and flipping burgers for minimum wage to pay for school? RBC has a solution for you! We’re looking for 6 university or college students to write an online blog about money as it relates to you, as a student!”

Until the 31st October, the bank is accepting online video applications for six student blogger positions at its new website. Once hired, the bloggers will initiate and coordinate online discussions on the new RBC p2p website. In true net generation style, the final six will chosen by their peers, who can vote on their favourite video audition at the website. It’s being billed as a site for students by students.

A student like me

RBC’s idea is that college kids can learn about things like budgeting, savings and investments, from people who are going through the same things them.

With a tone and style that is very non-bank, RBC p2p promises to provide an online forum where students can speak openly and honestly about their financial issues, struggles and concerns. All content will be driven by students and the six new student hires will manage discussions, blog about their own banking experiences, and share information about money issues.

In RBC’s media release announcing the launch, Michel Savoie, who is hosting the RBC p2p site and leading the blogging team said: “I see RBC p2p as a place where students can share stories and experiences and talk about solutions that will work for them - and what better way to do that than with a site for students, managed by students.”

It will be interesting to see how the site develops once the bloggers are on board, but it’s a really nice and innovative use of social media.