Social Media Compliance Guidelines for the Banking Industry
Social media is still seen as a somewhat new medium for businesses. It’s generally defined as an online tool for interactive communication through the sharing of content, text, images, audio or video. Micro-blogging websites such as Facebook, Twitter, and Google+ along with forums, blogs and customer review sites, photo and video sites like Instagram and YouTube, and professional networking sites like LinkedIn are all considered forms of social media.
Social media can be implemented for the retail banking industry in a number of ways, from general advertising to gathering feedback from the public and providing incentives for opening new accounts. Social media provides a great way for general engagement with new and existing customers. However, the less-secure environment surrounding social media can also carry some risks for financial institutions.
The Federal Financial Institutions Examination Council (FFIEC) released guidelines in December 2013 to provide financial institutions some considerations in their implementation of a social media strategy. These guidelines were meant to help the retail banking industry and other financial institutions with developing their own policies and procedures regarding social media, as well as assessing the risks involved.
A few of the regulatory guidelines the FFIEC is promoting within the retail banking industry are:
- Institute Social Media Policies and Procedures. First, a financial institution should take time to review the applicable laws regarding their current online activities. They should also perform a social media risk assessment to identify and measure the risks involved with social media. A bank that relies heavily on social media for promotion and attracting new customers should have a more detailed plan than a bank not utilizing social media very much. Having a set policy will help the bank know how to address situations like spam, negative comments, and privacy issues as they arise.
- Set Measurable Social Media Goals. Know how social media will align with current strategic goals and values at the financial institution. Social media is a powerful tool that can increase brand awareness and reach new customers, so establish goals with trackable Key Performance Indicators (KPIs).
- Monitor Social Media. Social media monitoring tools are available to help track and respond to inquiries and complaints in a timely manner. Have procedures set in place to address risks from posts or comments that may contain confidential information, like account numbers. Establish a channel for customers to submit complaints or disputes directly to the bank.
- Train Employees on the use of Social Media. Employees should be aware that their communication via social media may be viewed by the public and can reflect on the financial institution, subjecting the bank to compliance, operational and reputation risks. Employees should be trained on how to use social media professionally to combat these risks and to use the social media monitoring tools to ensure they are all on the same page.
Although there are risks involved for financial institutions to be involved in social media networks, it’s important to have a presence online. Social media offers a great opportunity to connect with your customers and promote the unique aspect of your brand.