This post originally appeared in Contact Magazine.
Understanding how social media can effectively become part of your marketing mix is one thing, but what if you also have the challenge of being a regulated entity?
Whilst most of these are very real and often challenging barriers to overcome, when you add to that the issue of compliance it’s enough to put any organisation off even trying.
Risk appears to far outweigh the advantages.
Perceived risk is often down to lack of education, fear of losing control of the brand, and of course negative sentiment… and that’s even before we add regulation to the mix.
Mitigating Risk
The threat of regulators alone are enough to make most compliance departments run a million miles from the idea of social communications. Your compliance team has a good bearing on the regulations that impact your business, but how in tune are they with how they apply to social media? Bearing in mind that all correspondence between a business and its client base may be subject to regulatory guidelines, makes social communications no easy thing.
Whilst regulatory bodies in Guernsey have not yet given guidance on the use of social media channels, broader and more comprehensive guidelines have been published by bodies such as the Financial Conduct Authority (FCA). In 2014 they set out their approach to financial promotions in social media.
“The FCA’s overall approach is that the financial promotion rules are intended to be media- neutral to ensure that consumers are presented with certain minimum information, in a fair and balanced way, at the outset of firms’ interaction with them. The rules include sector- specific requirements but in each case there is an overarching principle that any communication should be fair, clear and not misleading.”
Their latest consultation paper set out in further detail specific areas that firms need to consider, and provides some solutions and illustrative examples. These include:
Promotions for investment products – There is a specific requirement that financial promotions for investment products are identifiable as such. The FCA’s view is that – for social media in particular – it is important that in all cases, it is clear that a promotion is a promotion. One generally accepted way to do this, for character limited media, is the use of #ad in online posts.
Stand-alone compliance – Each communication (e.g. a Tweet, Facebook post or web page) needs to be considered individually and comply with the relevant rules.
Risk warnings & other required statements – Firms are reminded that there are requirements to include risk warnings or other statements in promotions for certain products/services. These rules are media-neutral and therefore apply to social media as
they would to any other medium. When taken into account with the supervisory approach to standalone compliance, this poses particular challenges for the use of character limited social media. One solution to the problem of character limitation is to insert images such as infographics into tweets, which allows relatively unrestricted information to be conveyed.
Image advertising – The FCA reminds firms that it remains possible to advertise their presence in the market through “image advertising” in a way which is unlikely to present difficulties with character limits.
Social Media Policy Guidelines
Regulated industry now has a responsibility to equip staff with the support and guidance on the use of social media. Creation of robust and current social media policy guidelines are a critical part of managing social media communications.
The best policies are often a collaborative effort; using inherent skills of digital natives within the organisation, but combining with the expertise of compliance and legal departments. In the US firms have been sanctioned for improper use of social media and for failing to provide adequate training to employees.
Need Help?
Crowd Media have not only written extensive social media policy guidelines for corporations with 6,000+ employees, we have helped those businesses incorporate training and compliance requirements successfully.
If you would like to learn more about how we could help you and your teams understand the risks and the opportunities, please get in touch.