The ABCs of social media in financial services

Increasingly, banks and other finance firms want to use LinkedIn, Facebook, and Twitter to engage customers. They see more of their peers doing it but, in their own firm, they’re not sure how to get past compliance.

“We want access to social media but we’re blocked. How do we get approval?”

To get to “yes,” you’ll need to answer 3 basic questions.

“Are we allowed to do it?” 

Firms typically have a policy (or are drafting one) that spells out who can do what using social media. (Here’s a fantastic compendium of such policies.)

Before your firm lets you post for business, they have to have a way to enforce their policy. Should posts be pre-approved? Can individuals use “Like” buttons? Are direct messages or comments allowed?

A few years ago, it was too difficult to pick and choose which functions people could use. So, the only choice was to block access except for a select few. Now, though, a range of software options from companies like Socialware and Actiance provide the kind of fine-grained control you need. By sitting between the user and LinkedIn, for example, they can present the user with only the LinkedIn features they’re allowed to use, and so enforce the policy in a very practical way.

“Before someone posts, can we review it first?”

The regulations largely center on preventing individuals from disclosing information they shouldn’t. (This brief paper from FINRA is a good starting point. It was confusing in a number of ways, though, so updates are being considered.)

All traditional recommendations and advertisements are carefully scrutinized by compliance before being disclosed to the public. And the same rules apply for much of the content published on social media channels. It’s hard to separate, for example, a research analyst hitting “Like” on a company’s Facebook page from outright recommending a “BUY.” And a broker’s profile on LinkedIn is seen as just another form of advertising.

We’ve had supervisory software from companies like Autonomy for years and now these products, as well as newer ones, are including content on social media. So, for example, when a broker updates her profile on LinkedIn, that update is routed to a compliance supervisor who can review it before it’s published.

While finding moderation tools may be easier, though, finding the people to operate the tools is the hard part. For most firms, having to review more content means having more people. Presenting a business case to justify such expense – and then fighting for headcount – is where you’ll struggle.

“Can we capture whatever people posted?”

This is the easiest question to answer. Every financial firm already has one or more digital safes. Used at first for email, then instant messages, these safes are now expanding to become the repository of all electronic communications, including those on social media channels.

All the tools already mentioned provide ways to capture content on the public channels and route that content to your firm’s repository. Then you can do routine reporting to check for policy violations or other issues. It’s a matter of integration instead of innovation.

Now what?

The issue, then, isn’t about someone in compliance simply saying “yes” or “no.” It’s whether your firm has the capacity to enforce policy, moderate certain content, and retain records for reporting.

Though the tools and practices are still evolving rapidly, it’s increasingly clear that “we’re regulated” is no longer an excuse for doing nothing.

Now, once you get to “yes,” you can move on to the truly difficult part (covered in next week’s post): actually using your newly-approved social media access in support of a specific business objective.

About John Stepper

Helping organizations create a more collaborative culture – and helping individuals access a better career and life – by spreading the practice of Working Out Loud.
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8 Responses to The ABCs of social media in financial services

  1. Nice Summary… and an accurate portrayal of the finserv social compliance landscape. We haven’t seen active companies doing much compliance hiring yet… but there is a perception that there will be.

  2. good list and don’t forget the “d”, does it make or save money for the company. social media can play a significant role in both, especially in these tough times.

  3. Nice post, John. This is an interesting topic. The same can be said about the pharma world. I understand the concerns these highly regulated businesses have. In my experience I tried to talk about what needs to comply to regulations, how auditing is done and what needs to comply. Often what is listed in the compliance manuals has little relatedness to practice. And if it does relate it focuses on the formal processes; the stuff that can be measured and controlled. Even though all auditors and compliance officers know the issues pop up in the informal networks. That’s where the work gets done and also where non-compliance can be found.
    Furthermore the compliance process is usually supported by a rigid, formal tool. Only one or two people in the company know how (and want) to update the system. They’re almost always out-of-date and regular employers rather not look there (because it’s out of date and they know a change request will take ages to process).
    I challenged an internal compliance officer to support part of the compliance process with a wiki. In short, he was amazed how well the described procedures matched with what happened in practice. The regular employees were more engaged in the compliance process than ever. And the auditors had never seen anything like it. Usually lots of talking was done to convince the auditor that the manual did relate to practice and was enforced daily. With the wiki, hardly any convincing has to be done; it proved itself.

    Hope this helps!

  4. Pingback: Compliance just said yes to social media. Now what? | johnstepper

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  6. desormais says:

    How do you separate between the social collaboration tools that are used with the financial services companies and the outside world, vs. those that are used internally for daily business. Shoud there be a separation?

  7. desormais says:

    How do you separate between the social collaboration tools that are used in the financial services institutions and their customers, vs. those used inside the company for day-to-day business. Should there be a separation? I sometimes am confused about which one is being referred to until i read a few paragraphs.

    • John Stepper says:

      That’s a good question. There is a tremendous variety in terms of functions and how they’re used. For example, Jive for internal collaboration allows you to publish, share, and build on a wide range of content types – docs, discussions, blogs, status updates, photos. (Think of the intranet in a box.)

      The same platform is often used for external communities – eg connecting SAP customers for support. Or sometimes just discussion forums are exposed (eg if you’re a Verizon Wireless customer, you won’t publish a doc, you’ll just search for answers and maybe contribute to one.

      Then there’s an entirely different class of software for interacting with Facebook, LinkedIn and Twitter. Socialware, for example, supports the ABCs of compliance (monitoring, moderation, retention) as well as functions for making sense of the notifications on the public platforms. (Eg alerting a wealth advisor to a job change update in LinkedIn) Other platforms have other functions for managing content.

      Is there overlap? Yes, and…it’s not widely used. For example, Jive has a feature called Fathom that let’s you monitor social media channels and then turn a tweet or Facebook post into a social object on your internal Jive platform. Ie it lets you turn outside events into inside events you can share and collaborate on.

      The internal collaboration space is much more mature and so the products are much more alike. Those that help you manage public social media are rapidly changing and you may need several of them to help you solve all the different issues you have – compliance, managing content, workflow, monitoring.

      Sorry for the long-ish answer. Hope that helps!

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