Financial and investment institutions have been slow to adopt social media. Not only do they share the common concern of not being able to ‘control the message’, but there is also the risk of falling foul of consumer protection and compliance regulations.
At the end of January, when the US Federal Financial Institutions Examination Council (FFIEC) issued draft guidance governing social media use, it caused a stir. Aimed at banks and credit unions, the guidance is intended to assist financial institutions identify, oversee, and manage the potential risk of using social media, as well as address the applicability of existing federal laws and regulations.
The deadline for feedback is this month, and the responses from the financial industry so far have been mixed, although mostly negative. Some believe the guidance is overkill in an already highly regulated industry. Others believe that it is simply putting common sense to paper.
However, the report contained some recommended best practice that could easily be applied to other industries. We took a look:
You should have a social media risk management strategy in place – even if you don’t use social media
This seems pretty obvious but, more surprisingly, its guidance states that even when companies do not use social media, they should be prepared to address negative comments, complaints, and manage reputational risks. We already know that pretending that social media does not exist will not protect your brand and ideally, be a part of the conversation. If not, you should at least consider how your brand would handle a social media PR crisis.
It is also recommended that the risk management program be designed with help from technology, compliance, security, legal, human resources, and marketing departments.
You should have a clear governance structure
The governance structure should clearly outline roles and responsibilities with regard to social media. The FFIEC goes as far as to say that the senior management of the company or the board of directors should indicate how social media contributes to strategic goals. Of course, the only way that you can prove that you are meeting your strategic goals is through measurement and setting the correct KPI’s for your industry
You should have clear policies and procedures in place, regarding use and monitoring.
The FFIEC call for all institutions to have a process for monitoring social media, not only posts by the employees, but also by third parties. Brands should be asking themselves these questions: which departments are allowed to post? Do you provide 24 hour monitoring if your brand is present in different markets? Have you considered crisis management? Who will get online and deal with inquiries in the event of a disaster or emergency? How will you contact them?
The report recognizes that ‘reputational risks exist when the financial institution does not address consumer questions in a timely and appropriate manner.’ Even the regulators understand the idea of being Socially Devoted and that it is best practice to pay attention to your fan base. Do you know your average response times and rates? By addressing how you engage with your fan base, you could be helping to protect your brand’s identity.
Providing reports to the management and reporting ROI
The proposed guidance calls for the regular reporting of Social Media effectiveness and the presentation of social media monitoring to the board or management. This is good practice for any brand. Don’t forget, social media is about two-way communication. You can listen, as well as talk. There are a number of metrics you can use to evaluate your effectiveness. Keep an eye out for our series of in-depth industry KPI studies, which we will continue to release over the coming weeks. And don’t forget, you should be reporting your findings on a regular basis to those on the top floor so that your brand can act on those findings.
Employee training programs
The report mentions two concerns: one is employee participation on official company sites and the other is communications on the personal social media accounts of employees, which may be viewed as reflecting your company’s official policies. Employees should receive proper training on company policy. Although you can no more control what an employee says to his friends via social media than you can via a telephone, employees should realize that social media is a public space, and what is written there can stay around indefinitely. We recommend common sense. Directing the appropriate questions to CRM or PR, not acting as an official spokesman, and taking responsibility for the brand by not badmouthing the company or it’s products on public forums are just a few of the guidelines we have seen other companies adopt.
What do you think? Does your brand follow this guidance? Or, do you think it is unnecessary?