The power of social media and real-time engagement seems especially attuned to banks and financial service providers. After all, these industries are built on the value of customer relationships and real-time and online transactions. Furthermore, banking and financial services customers are generally a savvy bunch: things like interest rates, financial products and quality of service can dictate whether customers stay put or shop around. As a result, banks that successfully harness the power of social media for financial will not only build customer loyalty, but also use networks as a platform to generate valuable customer insights, create buyer personas and encourage satisfied users to refer friends.
It sounds intriguing, but all of this comes with a catch: for banks and other financial institutions, a successful customer relationship is predicated on trust. However, the inherent openness of social media can also lead to privacy concerns, or worse yet, noncompliance with applicable banking and financial services laws. With that in mind, we'd like to navigate that fine line between real-time engagement and maintaining compliance in the brave new world of social media.
Three Steps to Master Compliant Real-Time Engagement
In order to successfully address this challenge, financial institutions need to do three things.
- First, determine what compliance issues apply to them.
- Once they understand this, they can build internal and external controls to mitigate these risks. "Internal" controls involve things the bank itself can manage: its social media policies, archiving requirements, employee training, etc.
- The "external" elements primarily involve educating users. While banks want their users to share their thoughts and opinions, social media for financial firms should not, of course, encourage users to share personal financial data.
Once these controls are in place, financial institutions can drive real-time social media engagement with the confidence that the end results will be compliant and effectively managed.
Determine What Compliance Issues Affect Your Institution
Financial institutions can't plan for social media compliance if they don't know what rules apply to them. Therefore, we suggest marketing managers pull up with their General Counsel, auditors and IT staff to review all applicable regulations. We won't specifically get into the laws themselves - we'll defer to your in-house lawyers for that - except to say a major concern facing banks within the realm of social media involves the need to archive user data. This white paper, courtesy of the National Archives, provides useful guidance on best practices for capturing social media data. Show it to your lawyers. (Hopefully they've already seen it.) Similarly, financial institutions will want to consider purchasing a social media archiving tool to help automate this process.
Build in Controls to Minimize Real-Time Engagement Risks
Once financial institutions know what they are on the "hook" for from a regulatory standpoint, they can build in the internal controls to minimize risk. Such controls include:
- Creating pre-approved social media editorial calendars.
- Training staff on social media compliance.
- Ensuring that new products and apps are compliant with data privacy regulations.
- Having IT processes and tools in place for data archiving and deletion.
- Collect a one sheet of notes of issues when you run into them.
Of course, building in-house controls is only half the battle. Users need to be educated. They need to understand that while they can share every minute detail of their lives on Facebook, they need show restraint on your social media networks. This means having new customers sign a form whereby they acknowledge that they understand the risks of posting sensitive information on sites. It means frequently posting helpful reminders on Facebook and Twitter to refrain from sharing sensitive information. It means that when you do see a user post such information, to delete it immediately, contact the user, and make sure you have an audit trail proving you contacted them.
With Controls In Place, Firms Can Confidently Drive Real-Time Engagement
Now that firms understand what regulations apply to them and how they can effectively manage compliance, they can confidently drive real-time engagement. Tactics include newsjacking content, posting content that humanizes and builds your brand, running contests and promotions and providing practical, time sensitive assistance to customers.
Social media for financial firms, as we all know by now, can prove to be a huge differentiating industry in the marketplace. We admit that the demands for ensuring compliance may seem foreboding, but there's a huge silver lining here and it has to do with the nature of your firm itself. Financial institutions, more than any other type of business, manage risk. That's your core competency. Every financial institution has in place rigorous processes to do this, and ensuring social media compliance is no different. See? It's not so bad.
With that in mind, we'd like to throw it back to you, our readers: what are you most pressing challenges in social media compliance? Have you invested in any automated tools? Have they performed as expected? Join the conversation below!
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