Just DON’T do it! That’s the social media motto for Chief Compliance Officers (CCOs) in virtually every arena of the heavily regulated financial services universe. The antithesis of NIKE’s “Just Do It!” But no matter, social media’s already got it’s “nose under the tent.” Sticking your head in the sand isn’t exactly a workable strategy these days especially as the ever expanding, ever maturing social media amoeba continues to deliver more and better channels for internal collaboration and external market engagement. That’s the premise of a recent study by David Houlihan, Esq., principal analyst with Blue Hill Research and the author of the study, “Customer Journey Analysis: Securing Social Media Strategy in the Financial Industry.”
According to Houlihan, “The openness and speed of communication available through enterprise social media also creates attendant security, reputational, and legal and compliance exposures. “For the financial sector, in particular,” he adds, “stringent regulation, high likelihood of cyber-crime targeting, and the complexity of partner environments create a high probability of incidents and stakes that have traditionally served to discourage adoption.”
But what if your customer base expects it?
What if they want to read your blogs, posts, tweets, etc. Sounds ridiculous, but look down the road at your market going forward. When’s the last time your phone actually rang? How old was that caller? And how much of your day now is spent emailing? Texting (with caveats)? As your customers use of communications channels expands (or narrows considering the decline of the phone call), the smart money is looking at the benefit to developing a sensible social media strategy.
Financial services being what it is — highly regulated — demands compliance professionals provide clear roadmaps defining how their firms balance compliance and risk management requirements with the upside presented by social media strategies in ways that minimize the demands placed on limited organizational resources.
Or you can close your business…
Even traditional organizations, loathe to adopt social media strategies are under greater pressure to engage — essentially to stave off a loss of business or mindshare to competitors with more liberal social media policies. Internally, compliance professionals are pressured by their marketing departments, sales teams, and third-party associates. Implementing appropriate policies and procedures is seen as a way to decrease the incentive of individuals to go “rogue” in their use of social media to engage with prospects. Besides which, your people are using it anyway.
Run the strategy before it runs you
According to the Blue Hill study, the core of financial services organizations’ compliance’s risk mitigation and compliance management efforts include:
This last piece, Houlihan writes, is important because it addresses the challenge of “balancing risk mitigation with minimal oversight labor burdens for compliance and minimal delay and limitation for social media users. The organizations surveyed increasingly rely on automation for both content monitoring and access control and policy management to keep pace with the expanded oversight challenges contributed by social media channels.
In particular, Blue Hill’s report targets:
These three, particularly for financial services organizations, must have a specialized focus on mitigating the mix of regulatory, legal, and security exposures posed by social media use.
Who’s monitoring your firm’s social life?
Increasingly, CCOs are outsourcing the function to third-party technology solutions (why reinvent the wheel!) like us. They’re relying on Electronic Communications archivers to help them manage and retain all those terabytes upon terabytes upon terabytes of email, social media, texts, and instant message communications. So when the regulators come calling they can quickly locate, review, and produce any captured electronic communication firm-wide.
What’s your plan for social media compliance? Who’s watching the chatter? How are you staying ahead of the deluge? Because you already know there’s no standing still. The smart money is planning ahead to be regulator ready. Are you?