Social media and social networking services have set the world abuzz, and businesses and financial institutions in South Korea are no exception. Last year saw a surge in use of social media in South Korea, which included financial institutions rushing to tame the beast and trying to better communicate with customers.

In this new report, The Reality and Promise of Social Media for South Korean Financial Institutions, Celent examines this phenomenon. The rapid proliferation of smartphones has helped fuel the popularity of social networking and social media in the market. This is not a fleeting trend. Institutions in South Korea are seeking ways to parlay it into a business opportunity.

Many South Korean financial institutions have introduced social networking services to complement their businesses. However, the scope of use remains limited, with the bulk of firms primarily using social media as a tool to communicate with customers or for public relations. As such, social networking services are being underutilized, and firms can do more to realize the full potential of social media.

“Financial institutions should not limit their perception of social media to merely being a communication tool. Rather they should view it as a powerful tool that can enable new business opportunities,” says KyongSun Kong, Analyst with Celent's Asian Financial Services group and author of the report. “This makes a strategic approach all the more critical.”

This report examines the results of a Celent survey of financial institutions focusing on the proliferation and use of social media in South Korea. Based on these survey results, Celent suggests methods for financial institutions to best leverage the power of social media.

A Korean version of the report is also available.