Social media is no longer the exclusive preserve of the Facebook Generation eager to connect with each other or simply a channel for consumer advertisers. It is fast becoming a valuable multi faceted communications tool with many industries actively using social media networking sites to promote their products and services and drive commercial success.
Mirroring the trend, the finance industry is also waking up to the power of engaging with customers through social media at a time when its clients are increasingly turning to online resources for information and advice. Last year consultancy giant Capgemini, forecast in its World Banking Report, that social media was on its way to becoming a “bona fide channel for executing transactions”, and previously a study by Accenture stated that half of US financial advisers had successfully used social media to convert enquiries into clients. So far, so good, so what’s the catch?
There’s no doubt that social media is a brilliant engagement tool. Just as traditionally financial advisers spent time visiting clients, sending newsletters, making regular telephone calls or networking for example in a pub or sports club, social media can now be used in the same way – but far more quickly! In fact, it’s the instantaneous nature of social media that is proving to be a double-edged sword. Organisations can communicate with thousands of people, and respond to comments in seconds but remember tweets and posts are usually permanent, often remaining online even after deletion.
There was a time when a company’s ‘two sets of eyes’ policy meant sanity-checking one or two pieces of print advertising each week. Today, companies are regularly tasked with monitoring several hundred social media interactions every day, putting huge pressure on already stretched specialist departments in terms of managing workflow and information security. The sheer volume of interaction and the need for immediate response demands strict protocols over social media risk management and compliance.
FCA takes the lead
Recognising the importance, and pitfalls, of social media in a heavily regulated industry like finance, the Financial Conduct Authority (FCA) is soon to publish its guidelines for social media, designed to help financial services organisations maintain best practice. The guidelines are likely to cover the entire digital environment (based on the draft published in 2014) including blogs, microblogs, client forums, images and video sharing platforms.
So how do those operating in the finance sector successfully interact with clients via social media and meet FCA guidelines at the same time? Here are my top tips to getting it right:
- Ensure any social media policy is consistent with company employment contracts
- The policy should be clear on the boundaries and expectations associated with advisers’ and employees’ personal social media accounts
- Have centralised control of social media accounts with full audit trails to minimise risk
- Communicate guidelines for social media engagement clearly to all employees to avoid confusion and encourage consistency
- Establish a review of all outbound content either carried out internally or by a suitable nominated third party provider
- If carried out in-house, assign distinct roles and foster cross-function collaboration, for example, the PR department has the authority to change social media content and respond to social media enquiries with the risk management department validating content for compliance with FCA guidelines
- Keep messages clear and fair and take care to ensure they are not misleading (just like all other forms of advertising)
- Don’t over-sell products, use social media to improve the way you do business by sharing best practice and resources, acting as a guru in your field
- Openly answer questions from peers to reflect a spirit of collaboration and strengthen the reputation of your industry
- Maintain adequate records of important social media communication, don’t rely on digital media channels because they continually refresh content with the consequent deletion of older material (one for the IT department)
- Demonstrate a proven ability to manage third party posts from clients on both social media channels and corporate websites
- Consider investing in an on-shore social media risk management and compliance platform to ensure data storage is compliant and to generate accurate audit trails
- Ensure that any management tools used have been robustly penetration tested and can evidence industry security standards. Systems should demonstrate that all employees (who potentially access data) have been security checked and are effective in the event of a problem or security breach.
Social media should be considered a huge opportunity not a threat. Those in the finance sector need to take the bull by the horns and not hold back on investing in social channels for fear of falling foul of regulations, incurring hefty fines or damaging their corporate reputations. Now is the time take action. By putting in place the right processes as recommended by regulatory bodies like the FCA, communicating rules clearly to employees and implementing the latest social media risk and compliance platform such as CrowdControlHQ, financial services organisations will be ready to embrace the challenges of today’s digital age. The rewards of meeting FCA guidelines will be clear to see: enhanced customer satisfaction, vocal brand advocates and boosted profits.
James Leavesley, CEO