Here's How to Ensure Your Bank Is Remaining Compliant on Social Media

Posted by Doug Wilber on June 15, 2018

Here's How to Ensure Your Bank Is Remaining Compliant on Social Media

Social media marketing compliance is no small task. Here’s how financial organizations can avoid running afoul of advertising and customer communication regulations while still delivering compelling brand messaging through social media.


Compliance is hard — especially for financial organizations. From FINRA to the OCC, the number of regulatory agencies governing what banks can and can’t do in their advertising and communication activities dwarfs that of other industries. Under the thumb of targeted regulations more abundant, restrictive, and convoluted than in any other vertical, banks have to watch what they say, and how they say it. Educating yourself on the regulations is one thing; translating that knowledge into a social media marketing strategy that has compliance at its core is another thing altogether.

The social media marketing landscape may sometimes seem like the wild west, but that doesn’t mean banks can rush in with guns blazing — it’s a lawless country for some, but not for all. Here’s how the best social media marketers in the financial services sector stay ahead of compliance issues:

Be Honest, Clear, and Concise

The Dodd-Frank Act of 2010 and Section 5 the FTC Act strictly prohibit Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) in their marketing and communications. It basically boils down to this: don’t lie. And it’s intended to prevent consumers from being “tricked.” But it’s more complicated than that — there are three keys here:

First, representations, omissions, and even “implied representations” are considered material information — so you can’t just exclude or put a positive spin on important information.

Second, the statute designates a “reasonable interpretation” by “a reasonable member of the target audience” as the determinant for what constitutes such “unfair…acts.” In other words, you have to consider your audience: if you’re marketing reverse mortgage loans to retirement-age prospects, your messaging should be tailored to ensure that demographic comes away with a clear interpretation.

Third, your messaging can be flagged as misleading even if the majority of your audience understood it. All it takes a “significant minority” misinterpreting your message to run afoul of UDAAP. So consider your audience, speak to the potential minority, and strive for clear, inclusive messaging.

Specific Terms Require Mandated Disclosures

Achieving compliance in your social media marketing comes down to terminology: making sure you’re pairing the right disclosures with the right terms is critical. There are a wide range of different agencies and regulations governing what you have to say and when you have to say it — you’ll need to watch out for all of them.

Regulation DD of the Truth in Savings Act (TISA) covers the specific terms and conditions banks are required to disclose when marketing deposit-based products. The Truth in Lending Act (TILA), Regulation Z dictates disclosure requirements for loans. The SEC’s Regulation Fair Disclosure (FD) requires that publicly traded companies disclose any material information to all investors at the same time.

These regulations are far from straightforward. Nailing down the specific language required for compliance with each will be tricky, but absolutely crucial.

Communications Must Be Representative of Your Audience’s Demographic Diversity

If your messaging includes pictorial or textual representations of your customer base, make sure they represent the full diversity of your actual customers. The Equal Credit Opportunity Act prohibits even the inadvertent exclusion of demographics based on age, ethnicity, race, and sex, so it’s up to marketers to ensure that their messaging aligns with their customer base, and the Community Reinvestment Act (CRA) requires that depository institutions serving low- and moderate-income communities proactively market to their needs.

Automate Your Email Marketing

Email marketing is its own beast: the CAN-SPAM Act imposes specific requirements on promotional email marketing materials. The list of requirements is long, so the best route to go here is automation.

Putting It All Together with Gremlin Social

Before financial organizations can begin thinking about how to deliver compelling messaging campaigns through social media, they first need to make sure that compliance is covered. Banks that infringe on the complex web of marketing restrictions imposed by regulatory agencies risk doing more harm to their brand than good.

Building a foundation of compliance to undergird a well-balanced social media strategy that generates real ROI is crucial, but it’s far from easy. That’s why Gremlin Social offers an ABA-approved, turnkey social media marketing platform tailored just for the financial industry, enabling you to build a strong social media marketing strategy with compliance at its core.

With tools like post archiving, keyword filtration, and monitoring, Gremlin Social lightens the burden of compliance, allowing your marketing team to direct their efforts toward leveraging the power of social to reach their target audiences, generate more leads, and close more sales.

Topics: social media compliance

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