Today’s financial institutions are faced with a dilemma.
They can’t afford to not empower their employees to engage customers via a social selling strategy, but their electronic communication is heavily regulated by the FFIEC and FINRA, and failure to comply doesn’t come cheap. In 2017 alone, financial institutions racked up $8.3 million in electronic communication fines from FINRA.
Thankfully, a well-defined social media policy (and the right tools) can help your bank stay within the boundaries of compliance while also turning your employees into your company’s best advocates.
Why a Social Media Policy Is Worth the Effort
Social selling has grown popular for one simple reason: It works. Consumers trust content that your employees share on social media way more than they trust content posted from your brand’s page.
Although it’s not in the financial sector, Whole Foods proved just how powerful social selling could be a few years ago. The company asked employees to share the same post it shared on its brand page and determined that posts shared from employees’ personal pages generated eight times more engagement.
Employees are able to give branded content a more relatable voice because, well, they’re living, breathing humans. However, humans are inherently imperfect, and while Whole Foods doesn’t necessarily have to worry about the regulatory ramifications of a well-intentioned but noncompliant post, banks certainly do.
That’s why even if a social media policy wasn’t explicitly required by the FFIEC — which it is — it would be a fantastic idea for your bank to craft one.
A Policy Primer
So what does your social media policy need to include? Per the FFIEC’s “Social Media: Consumer Compliance Risk Management Guidance,” your policy should include:
- “A governance structure with clear roles and responsibilities
- Policies and procedures regarding the use and monitoring of social media
- A risk management process for selecting and managing third-party relationships in connection with social media
- An employee training program that incorporates the institution’s policies and procedures
- An oversight process for monitoring information posted to proprietary social media sites administered by the financial institution or a contracted third party
- Audit and compliance functions to ensure ongoing compliance with internal policies and all applicable laws and regulations
- Parameters for providing appropriate reporting ... that enables periodic evaluation of the effectiveness of the social media program”
Don’t Set It and Forget It
Social media policies are an important requirement for banks, and regulations closely dictate what needs to be included. But banks should go a step further to be sure they’re making the most of this tool. So once you’ve crafted your policy, review and update it regularly to account for staffing changes, tool technology updates, and key insights from your ongoing social media activity.
For instance, studies show that up to 90% of social media users already communicate directly with brands on social media. Your policy should guide employees on what to do if issues come up in a direct message (e.g., a customer shares private information like his or her Social Security number). Social media has a pulse, and your policy has to be living and breathing to keep up with it.
Additionally, a coordinated social media workflow and robust employee training program are must-haves. Your policy should outline individual roles and responsibilities in the reviewing, approving, and posting process. Train employees on what constitutes approved content, and have a clearly defined approval workflow to quickly review their posts and comments. Consider also providing preapproved content for employees to post at will.
A good social media policy isn’t just an FFIEC requirement; it’s necessary for banks to be as present as their customers demand without stepping out of bounds. With these few tips in mind and your social media policy in place, your bank can be social selling before you know it.