The challenges of using social media in the financial services industry

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Challenges for financial services in social mediaThere are unique challenges when working with financial brands when developing their social media strategy and implementing it. Concerns over falling foul of industry regulations, lack of experience in social and existing company culture all combine to present a number of hurdles at the outset. However, once these are overcome, there is also a huge opportunity to stand out from the crowd, by taking advantage of the industry’s generally slow take up of social media.

In order to successfully guide a financial services company through this journey, a number of activities need to be put in place first. Here are four things every financial business needs to do in order to become a successful digital leader in the industry:

  1. Lay solid foundations in social media internally
    It is important to educate staff on all aspects of social media – the business value it can deliver, why it is so important for the industry, how to engage in it, the risks associated with it, setting up a governance structure to manage the activity and how to act in a crisis situation. In a nutshell, it’s about enabling staff to confidently become involved while at the same time doing it in a way that protects the brand.

  2. Define an effective social media channel strategy
    How the business engages with its audience is one of the key factors in the success of its social media activity. Among other things, all social channels should contribute to business strategy and objectives, there should be a clear, coherent content plan for each channel and every channel should have a clear primary marketing objective.

  3. Implement a change management programme
    Attitudes towards social media amongst staff are understandably often focussed on the risks and dangers of becoming involved. While these are valid concerns, it is important to educate staff these risks can be managed and controlled, while the benefits are significant and can deliver the business real value if done in the right way. A programme dedicated to changing attitudes and educating on what’s possible is another crucial piece of the jigsaw.

  4. Be clear on how FSA regulations affect social media activity
    While FSA rules are media neutral, thought and consideration still needs to be applied to how this affects the business’ social media policy. Clear guidelines on what staff can and can’t do needs to be accurately defined and then communicated effectively across the organisation, in order to mitigate this risk to the business.

If you’re a financial services company and are considering increasing your social media activity, make sure you consider all the factors above. At first it may feel a bit scary, but I assure you it’s well worth the initial effort!

Photo credit: morebyless on Flickr

Social business: 10 tips for safe, secure and compliant collaboration

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Human pyramid representing collaboration

Image from Flickr courtesy of Keith Williamson

One of the main obstacles stopping companies from embracing a social business model is the fear that opening access to social media for employees will hinder employee productivity, or will open up new security, compliance or privacy concerns.

Sarah Carter, the VP of marketing at Actiance recently put together a presentation which gives businesses 10 top tips for secure collaboration:

Ten Tips to Safe Social Collaboration

1. Understand the landscape

  • Social media is now being departmentalised far more than before -
    • The average organisation in UK now has five Facebook fan pages, instead of just the one, as it was 12 months ago.
    • IBM North America has 39 twitter accounts.
  • By 2014, social media will be the primary interpersonal communication service for 20% of business users instead of email.

2. Consider and address the risks

  • The risks to social business and online collaboration are just the same as before, only now the speed and spread of communications is much greater and faster. Dealing with issues in real time is something you must be prepared for, as well as online reputation and crisis management.
  • Provide a secure, collaboration environment to reduce the risk of data leakage, whether inadvertent or malicious.
  • Social media channels are becoming increasingly targeted by virus and malware hackers. The trusted nature of social networks means people are more likely to click links if it looks as though it was sent through LinkedIn, for example.

3. Understand the legal and regulatory situation

  • As social provides a form of electronic communications, we have to consider the existing regulations affecting communications.
  • Consider retaining the content that is created and shared over social media.
  • Think about archiving commentary between your customers and employees (has added CRM benefits too).

4. Establish a presence

  • It may be necessary to divide your social media presences across a variety of accounts as your HR and marketing departments will have different approaches to how social media will be used.

5. Engage and be engaging

  • Ask questions, participate in groups and Q+A areas of sites and communities.
  • Follow what is going on in the lives of your employees, customer base and even competitors.

6. Consider Enterprise Social

  • It might be necessary to go beyond the major social networks such as Twitter or Facebook for your employees to collaborate. You may like to check out our ‘living’ list of social media collaboration platforms.

7. Educate

  • Educate your users about the risks of using social media - not everyone will have the same appreciation about the effects that a mistake can have on your online reputation.
  • Keep yourself and your IT team educatedabout the constantly evolving social landscape - users will be learning about new tools and platforms at a fast rate and it’s important to stay abreast of trends.
  • Educate your network about the events you are running, or attending, and use social platforms to arrange meetings before you even arrive.

8. Control, Manage, Secure

  • Ensure your employees who participate on social media for your company do so with accounts that can be clearly identified as corporate to help keep records of conversations and to aid customers identification.
  • It is possible to restrict access to certain areas of social networks and you may need to consider this*. For example, employees may need access to Facebook during office hours, but do you want them playing FarmVille?
  • Similarly, it is also possible to establish black and whitelists of words that can be used. Avoid the issue of an employee inadvertently saying that they “guarantee” an outcome by preventing it from being published.*

9. Review and Revise

  • Identify which policies are working, review your policies and then move on.

10. Measure

  • Response rates from social media outreach is important to measure across the different networks, and also against email.
  • Some of the things you measure will be simple, eg, number of connections you make, however remember that quality is especially important so numbers alone is not a suitable metric. You will need to identify metrics that accurately show the value of your social media strategy and key business goals.
*these two points were described as examples of Actiance’s features.

Preparing for significant regulation changes in social media

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My first session on the IAB Social Media Council had us debating the upcoming regulation changes which will see the ASA’s remit extended to cover marketing on websites from 1st March 2011.

So what? Well the Advertising Standards Authority is “the UK’s independent regulator of advertising across all media” but until now this did not include websites (and for websites also read social networks, blogs etc). This new regulation means that marketing communications on companies’ own websites and in other third party space under their control, such as Facebook and Twitter, will have to adhere to the “non-broadcast advertising rules” as set out in the CAP Code.

The aim is to drive companies to ensure marketing messages on their websites are legal, decent, honest and truthful. This should go without saying but think of how celebs are used in social media marketing – when they are speaking about a product are they doing so because they are paid? What about the blog you read extolling a product – was that review paid for? Currently this is unclear but the ASA aims to remove that uncertainty.

How? Well, the ASA does not set rules, just guidance so it is currently unclear exactly what will fall foul of the regulations.

On the Council we are looking to lead the way with self regulation and I am interested in your views of how this should be done?

  • Should sponsored tweets feature a hashtag such as #ad or #spon
  • What if a paid brand advocate happens to tweet about the brand, is this ‘paid’
  • What constitutes being paid? Is a blogger who is given product to review ‘paid’?

At FreshNetworks we have always advocated responsible social media practice and support the ASA’s work to clear up this grey area.

I will be updating you as new information comes out and would love your thoughts on this as they will help drive the self regulation response.

Social media: Risk and regulation in the financial service industry

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Juggling

Aside from niche communities,  customer driven markets and transparency, risk and regulation was one of the key discussion points at our social media in financial services round table event.

The current situation

Initially financial services brands and institutions were reluctant to use the various social media tools and technologies available on the market, largely because of the stringent rules and regulations that govern the industry.

Financial services brands have strict codes of conduct when it comes to data sharing. It’s often the case that external sites like Facebook and Twitter simply cannot be used or accessed within the firewall of a business for fear of information inadvertently being leaked out.

With the Financial Services Authority (FSA)  asking firms to apply strict advertising rules to more informal communications like Twitter, forums and blog posts in order to stay compliant, it’s no wonder financial services brands are less keen to adopt new technologies - it’s just another area they can fall down on.

However, with large banks and institutions like  American Express, ING Direct,  Bank of America and HSBC all using social media in one way or another, it seems that financial services brands are starting to  realise they can use social media as long as the activity is well planned and uses a pre-defined, fully developed social media strategy to ensure that risk is managed effectively and that regulations are adhered to.

What does the future hold?

With more and more financial services organisations adopting social media it will become an inherent part of the industry’s online infrastructure. As long as businesses have a pre-defined, robust social media strategy, with clear processes in place, then both FSA regulations and other guidelines will remain intact.

Proactive identification of compliance and the possible business risks from online conversations will also help financial services brands use social media in a way that aligns with industry standards.

Similarly, each business should develop a social media policy for employees. The policy should form a  standard part of all employment charters and contracts and should determine social media activity  both internally and when representing the company externally. Again, this will ensure that rules and regulations are not broken. This policy should be updated on a regular basis to keep in-line with changes to the social media landscape.

Our next post will look at resourcing social media in financial services businesses.