SOCIAL MEDIA IN FINANCE
The Financial Services Social Media Guidance Landscape for 2014
The most recent guidance is from the Federal Financial Institutions
Examination Council (FFIEC) and was published at the end of 2013. The documentation is designed for US financial brands, but with the UK-based Financial Conduct Authority (FCA) and other overseas bodies also expected to release similar, updated guidelines soon, examination of the FFIEC regulations should provide some globally relevant and valuable insights. In brief,
the guidance states that financial institutions are expected
to manage risks associated with all types of consumer and customer communications, no matter the medium. It also suggests that financial brands are expected to use the guidance in their efforts to ensure that their policies and procedures provide oversight and controls commensurate with the risks posed by their involvement in social media. Interestingly, there are no new requirements that apply directly to social media, meaning guidance is never specific to a network or platform. Therefore, applying the rules to financial promotions made using new media is no different to financial promotions using any other medium. The implementation of social media strategies and programs is discussed
in moderate detail, such as the need to remain aware of the risks involved in digital media. Indeed, the document states that all financial service institutions should be proactively managing the risks associated with social media, whether they are active on social media or not. This means that even if financial service brands are not active on social media, this should be because they have made a decision not to be active for clear, well-documented business reasons. It should not be an omission or oversight. More than anything, what the FFIEC guidance encourages is some common sense due diligence for financial service firms with regard to social media. The main FFIEC guidance recommendations (in plain English) are:
• Make sure that all your communications are compliant • Have a social media strategy • Monitor social media activity around your brand
• Have processes, guidelines and training that provide the appropriate controls
• Have an audit trail • Measure and report activity against your strategic goals
Turning Social Media into an Advantage It’s clear that, though there are
complexities to the financial services industry which make social business initiatives challenging, there are significant gains to be exploited if handled intelligently. Two ways to turn social into an
advantage: 1. Use social media to enrich and differentiate brand
2. Stand out through great customer service
Firstly, there is using social media
to enrich, differentiate and improve brand reputation. In an increasingly
64 March 2014
automated and non-personal brand-consumer ecosystem, social media platforms provide portals for financial services staff to connect with the customer. Furthermore, they support marketing functions with a suitable new means of conveying a more real, likeable and human brand.
Secondly, the downfall of
traditional customer experiences in financial services can be reversed and improved by social media, but there ways in which it can improve upon them too. A powerful component of social media customer service is the ability to run many interactions in parallel, making it a more scalable and efficient means of resolving queries. Research has proven that customer
care interactions over social media can cost an organization as little as $1 when the equivalent phone interaction will cost $6. That financial services is a
historically slow-moving industry stifled by legislation is in itself even more incentive to innovate. Huge ground can be made by the companies who are able to negotiate the potential obstacles and develop effective social business processes. One of
the biggest challenges
that financial services institutions have been both constrained by and may still be hiding behind is that of regulation. Regulators have been typically cautious and slow to provide clear guidance to their wary
financial services community members.
Command Centers The concept of a social media ‘command center’ originated
with brands like Dell and Gatorade as far back as 2009. However, a lot has changed since those early models. Businesses are now far more socially mature than they were
then, meaning that the functions command centers perform have much more impact across an organization and that they can no longer be accused of being a vanity asset as they once may have been. Additionally, the social media monitoring and analysis
technology powering the centers is much smarter and more sophisticated than before. The result is that the information gathered is more relevant, more powerful and of higher impact. On top of both these factors is of course the ever-increasing adoption of social media by the public, meaning the volume
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