Despite the hype, nearly two thirds of the world's retail banks have no plans in place to use social media in any way, according to research from Ovum.
The survey of 150 banks shows that only six per cent use social media to deal with customer queries with another one per cent planning to make the move by the end of next year.
Channels such as Twitter and Facebook are slightly more popular for marketing, with 14% of respondents using social media for this and another 12% planning to tap the technology to promote their business by the end of 2012.
Ovum identifies First Direct in the UK, Citi, Bank of America and Wells Fargo in the US and Rabobank in the Netherlands, among the handful of firms getting to grips with the emerging communication channel.
The American banks have all enthusiastically taken to Twitter to provide customer service with Citi hiring 'guru' Frank Eliason last year to lead its social media efforts.
Recently Australia's NAB took to Twitter in a bid to calm disgruntled customers after its online banking system fell over. In the last week it has again used the power of Twitter and Youtube to launch an aggressive marketing campaign against its rivals.
In the UK, first direct has long been ahead of its high street rivals in the use of new technology. In September its CEO Matt Colebrook warned that the social Web is something that cannot be ignored by banks and should be embraced as a means of connecting with customers.
Martha Bennett, analyst, Ovum, says: "The banks without a social media strategy are being shortsighted and are placing themselves in a dangerous and vulnerable position compared to competitors who have realised that social media can and must play an intrinsic role in their business."Finextra is partnering with Thomson Reuters and leading financial services firms to develop a series of one-day events exploring the use of social media within the financial services sector. The first two social media days - in London on 7 April, and New York on 18 May - feature speakers from banksimple, StockTwits, CME Group, Citi, HSBC, SEB and First Direct.