The Financial Services space is incredibly competitive, both in obtaining new clients and recruiting talent. In order to meet the collaborative and transparent demands of clients, firms must work to develop an involved community. Customer satisfaction and relationship development is very important. And as clients seek out thought leaders and specialists in their advisors and agents, personal branding must become a focus of all client facing employees. Social media provides an excellent opportunity to engage with clients, prospects, centers of influence, and thought leaders. Social media also allows for clients with similar interests to engage with each other. It provides a community development platform.
And while social media is a valuable tool for engagement, it also falls under strict regulations. These regulations can be difficult to understand and sometimes cause financial institutions to shy away from social engagement. The FFIEC recently published a social media guidance to address the application of these regulations. Below are 5 key takeaways financial organizations should consider when engaging on social media.
1. Don't take a one-size-fits-all approach to your social media initiatives. Consult with your legal and compliance teams and make decisions based on your institution's size, activity level, and third party relationships.
2. Regularly review compliance and risk procedures. You are responsible for what is posted by your institution as well as those site managed by, or on behalf of, your organization. You do not have to monitor all internet communications about your institution. You do want to ensure your social media communications align with the Truth in Savings Act, Truth in Lending Act, and Fair Lending Laws, just to name a few.
3. Develop a social media response plan. While your institution is not responsible for all complaints and inquiries on the internet, it's recommended that specific channels be developed to manage such feedback. Keep in mind issues like fraud and brand identity and privacy concerns. Monitor these channels and have a response plan in place.
4. Track and monitor analytics against your social media initiatives. Not all social activity is meant to drive revenue. Demonstrate to your financial institution's board of directors and senior management increased engagement, community development, and increased market and client understanding.
5. Have a clearly defined, and communicated, policy on employee use of social media. Develop formal training around these company policies. An employee's communications on social media may be viewed as reflections of the financial institution. It can always be subject to compliance and regulation policies.
Social media within the Financial Services space is still an emerging trend. Many companies are cautious given compliance constraints, but social media opportunity should not be ignored. Clients want to have a relationship with the organizations and individuals that manage their finances. It's important that those companies looking to embark on social have a strong social media compliance approval process in place, pre-approved comments and responses, and an internal policy published.