Your bank want to be your Facebook friend

The financial sector, eager to befriend the large and coveted Gen Y demographic, hopes a presence on Facebook will make it seem cool.

The 20-somethings who were there first aren't all keen on the idea.

Call it hip, sophomoric, or just lame, big names in banking, like JPMorgan Chase & Co. and Washington Mutual Inc., are trying to harness the trend-setting, word-spreading, 70-million-active users power of the social networking Web site. Charlotte-based Wachovia Corp. says it's open to getting on Facebook, and Bank of America Corp. has set up an Olympics-related page.

On the surface, tapping into Facebook's reach seems like a potent marketing strategy, a way to meet young people – and lots of them – on their own turf. Facebook is one of the 10 most-visited Web sites in the country, according to Hitwise. It's so ubiquitous it's become a verb. Politicians, nonprofits and rock bands have profiles there, and big corporate brands such as Coke, Saturn and Crest sponsor ads. Other companies, such as Ernst & Young, use it for recruiting.

But those successes don't guarantee that Gen Y-ers will want to be online friends with their neighborhood bank. After all, cancer walks are more inspiring than home equity loans, and a blogging band is cooler than a blogging bank.

“A buttoned-down organization trying to look hip – that's just like your 50-year-old drunk uncle at a wedding trying to dance with teenagers,” said Ted Claypoole, a partner specializing in Internet law at Womble Carlyle in Charlotte.

“However, if they go on and (act like) themselves, that's going to attract attention.”

Banks have tried before, and failed, to reach young people through young mediums. In 2000, the first time that the country's big banks introduced cell-phone banking, consumers didn't bite.

Facebook didn't respond to a request for comment, but the site, once reserved for party pictures and friendly smack talk, has shown no signs of shunning commercialization.

Smaller financial institutions are also on the Facebook bandwagon: There are more than 100 credit unions with profile pages, though most are rudimentary. Intrepid employees at the Service One Credit Union in Bowling Green, Ky., posted photos of an office sock puppet and information about a credit card seminar for students at nearby Western Kentucky University.

But for a corporate Facebook page to succeed, it must offer benefits – such as games, videos and contests – that the regular Web site doesn't, said Toby Kilgore, a principal in Deloitte's financial services group. It also has to allow negative comments, or it will seem disingenuous, he said.

And harsh feedback is virtually guaranteed. One four-member Facebook group, apparently started by a student angry over some overdraft fees, says it “is dedicated to driving the evil JPMorgan Chase Bank into the ground.” The banks, for their part, say they appreciate how Facebook lets customers communicate with them so easily.

“Facebook is a huge brand and innovative medium in which many consumers, particularly a younger demographic, engage with, so it's been an excellent vehicle in which we can have outreach to that particular audience,” said Tanya Madison, a JPMorgan Chase spokeswoman.

The bank, the country's No. 3 by assets, sponsors ads on Facebook. Its profile page, which is accessible to students, lets cardholders earn “karma points” for taking credit quizzes and redeem the points for prizes.

Washington Mutual, the Seattle-based thrift, has a profile that lets users play crossword puzzles with financial words, apply for free checking, and scour concert ticket deals. Bank of America set up a page for its America's Cheer campaign, which encourages people to post messages for the U.S. Olympic team. An application created by a user – not the bank – lets other users download to their profiles a list of the nearest Bank of America branches.

And Lending Club, one of the peer-to-peer lending sites that help users borrow money from strangers, initially launched on Facebook. It connects borrowers and potential lenders partly by combing their Facebook profiles for similar interests and geographies. (Lending Club stopped accepting new lender applications in April, saying it's registering “with the appropriate securities authorities.”)

Still, Gen Y-ers express hesitancy to mix Facebook with business.

Matt Nethery, a 24-year-old Charlotte resident who works for a hospital consulting firm, thinks the idea of banks on Facebook sounds cheesy. People log on to get away from work, he said, not to be reminded of their bank accounts. “Maybe if I was in college,” said Nethery, who graduated two years ago. “Maybe then I'd think it was cool.”

Last month, Jim Bruene, editor of the Online Banking Report, a trade publication, asked 500 Facebook users whether they'd be interested in viewing their bank account balance through Facebook. Seventy percent said “No way.”