Social Media and Banking Regulation
Financial institutions who implement social media programs are now facing the challenge of new rules and regulations of such interactions. Unlike other industries that can interact with consumers on a product level, financial intuitions have to tread lightly on social media platforms to ensure their messages are being pushed out in accordance with industry regulations.
American Banker reported that in January of 2011, the Financial Industry Regulatory Authority issued, “specific guidance to broker-dealers and securities firms about tracking and archiving social media correspondence, as well as many other issues pertaining to social media interactions.”
When social media drives the communication between corporations and the public, financial institutions must comply with the regulations that apply to their industry. Mark Schwanhausser, a senior analyst for Javelin Strategy and Research said that, “Social media is rewriting the rules and [increasing the] speed with which banks have to respond.”
Some large banks, such as Citigroup Inc., have chosen to work with various companies, including CoTweet, Socialware Inc. and Hearsay Social to support their social media strategy, while other banks are reluctant to share information on which technologies they use to run their social programs.
Jesse Engle, vice president of social media for ExactTarget weighed in with his thoughts on implications of social media stating, “[Banks] no longer have a choice [of whether] they will participate in social media…the volume of people who want to engage with companies via social media is increasing, and their level of expectation is also increasing.”
Is your financial institution using social media to engage customers? How do you ensure social media programs are in compliance with changing regulations? Let us know in the comments section below, or Tweet @bankingdotcom.