Social media in financial services – are you compliant?

The role that social media can play within Financial Services organisations is still, on the whole, slightly cloudy - even underestimated. As a result of the uncertainty around both regulation and the benefits that social activities can have on business, many of the tactics employed by those incorporating social media into their business model are borderline non-compliant – that’s if they exist, of course. 

Following engagement and consultation with the industry, this year the Financial Conduct Authority (FCA) published new guidance on financial promotions. Having taken a massive u-turn on it’s previous stance (including #ad in social content) the regulator now believes that hashtags are ‘not an appropriate way’ to identify promotional content – and they have reinforced the long-standing principle; communicating in a 'fair, clear and not misleading' manner. 

The guidance surfaces a number of compliance considerations that restrict the ways that organisations can influence customers to buy products. While the same rules apply across traditional media, there are specific guidelines that illustrate how they should be applied to social media. For example, the regulator takes a particularly strong stance on Twitter retweets, where FS companies must include a comment with disclaimers, highlighting any potential risks of the product if they wish to retweet a comment from a genuine customer recommending products based on price. 

Image: FCA guidelines - https://www.fca.org.uk/static/documents/finalised-guidance/fg15-04.pdf

This, of course has created a lot of nervousness in the industry – and subject to these restrictions many organisations have opted to limit or even steer clear of social media. However, at a time when customers are increasingly seeking out information and advice independently, this attitude could in fact damage the credibility of the company and thus their competitiveness. On the whole, the finance industry is waking up to the power of engaging and nurturing its prospects and clients through social media. Well managed, it is a powerful enabler in building meaningful relationships with customers and promote the brand. Left unattended, social media can expose an organisation to a wide range of risks associated with reputation, confidentiality, data loss and operational inefficiency. 

Worryingly, 50% of employees are already posting messages, pictures and videos via social media about their work - yet only 12% of companies offer formalised social media training2. We live in a world where everyone is connected digitally, all of the time. For consumers, it's where we seek information, discover, learn, seek recommendations and review products. For businesses, it's where you listen to your market, learn about and capture new customers, have conversations, answer questions, build relationships, improve your brand perception and recruit new talent.

Conversations are happening online about your business, your competitors, your products and your services whether you like it or not.

The Gartner 'Talent on the Digital Frontier' report estimates that 1 in 4 organisations will lose market dominance by 2017 due to digital business incompetence. The risks are clear; not adopting social media to support your broader digital ambitions can have an adverse impact on competitive advantage; and attract a negative perception by customers, prospects, employees, and partners.

Is your organisation ready for social?

Not only do organisations need to identify the risks of social media, develop policies to mitigate this risk and deploy the right technology to reinforce those polices – they also need to ensure employees are educated and empowered to use social media and supporting technologies in the right way. Everything that an employee does on social media builds their personal and professional brand.

“The real work is just beginning. Social Business priorities have shifted from scaling to integrating.”
Altimeter, The State of Social Business 2015

When faced with the challenge of improving an organisation’s social media presence and executing growth and engagement tactics; typically increasing the flow of content, frequency of communication and spend on social channels is the ‘go-to’ response. However, social media is fast becoming a field of study in its own right, and mature social organisations are looking to deploy fully integrated strategies across social marketing, social customer care, social HR and social selling tactics.

Investing in education to equip employees with the tools and knowledge they will need to be successful is one, if not the most important aspect of implementing and integrating social throughout the organisation. Contrary to some beliefs, employees shouldn’t be held accountable for creating and executing a social media strategy if they haven’t been properly trained.

Bespoke training, tailored to your business objectives

There is no ‘one-size-fits-all’ social media training program for businesses. You have unique objectives, governance and compliance structures - not to mention specific requirements for each team. For example, sales teams might need to improve their LinkedIn skills to target prospects more efficiently, customer service teams will need to know how to set up real-time listening streams in their social media monitoring software, while HR teams will need to set up employer branding campaigns and use social networks to identify potential candidates.

Training should be bespoke; aligned to what you're trying to achieve with social and your social media policies. These pillars provide the guardrails for scaling social media within your organisation, and is the first step in creating a culture where employees feel safe when talking about the brand online.

If any of the above makes you feel nervous about your social media activity - we've produced a whitepaper on FCA and Social Media Guidelines which you can download here

Or drop us a line at Palladium Digital to discuss how we can help build a roadmap for social media success at your organisation. We're very proud to have recently been nominated as a finalist for 'Best Financial Services Social Media Strategy' at the Social Buzz Awards for our 'social media driving license' training programme at RSA - and we would be happy to chat about how we can help you too! 

Resources

1 - weber Shandwick

2 -Altimeter Group, 2013


This article was co-authored by James Prebble & Imogen Wakerley of Palladium, a digital consultancy providing support to clients across digital strategy and insight, product and service design and digital capability development. For more information visit www.palladiumdigital.co.uk