With 73 percent of adults using more than one social media platform, banks and financial services companies are looking at social media as an efficient way to reach consumers. Navigating the compliance risks of social media was one of many presentations this week at the American Financial Services Association’s second annual Law and Compliance Symposium in Fort Lauderdale, Fla.
While outreach via social media may seem like an easy way to reach customers and potential customers, Riley Key, a Regulatory Compliance attorney with Bradley, said companies must identify the risks.
He said companies should view social media through three lenses:
· Managing social media content on sites hosted by the company
· Addressing social media content on sites not hosted by the company
· Using individual social media profiles for information
He said social media is here to stay with one survey indicating 73 percent of adults using more than one social media platform, typically Facebook and LinkedIn, while ages 18-24 are primarily using YouTube, Facebook and Snapchat.
Key said in order for companies to mitigate risk tied to critical issues such as compliance, legal, reputation and operations, they must first understand how the company is using social media.
Some of the ways companies use social media range from community engagement, to enhancing existing customer relationships, to brand awareness and more.
“The bigger concern beyond legal and compliance is reputational risk which could lead to negative public opinion as a result of dissatisfied customers,” Key said. “Companies need to understand the risk posed by social media’s unique features.”
He outlined those unique features as:
· Social media is interactive
· Social media is fast and public
· Companies don’t control the audience
· Companies are operating outside of their platform
He recommended that companies understand each social media platform they are using, the top four in popularity being Facebook, LinkedIn, Twitter and YouTube.
Key said the best way for companies to manage their social media risk is perform a social media risk assessment which should:FINA
· Identify the breadth and depth of social media use today and in the future
· Document areas of risk for reputation, operations and legal-compliance
· Identify weakness and strengths in the current social media compliance program
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