Why Banks Are Missing Out on Social Media

Nate Dogg and Warren G weren't talking about financial compliance when they sang "Regulate", but that same title could easily apply here. Though banks are starting to use social media to create a competitive advantage and as a way to build their customer base, they are facing stringent policies and regulations that govern their communication activities. First, let’s look at a few ways in which financial institutes are using different social networks successfully and innovatively without subjecting themselves to FINRA and other compliance activites that apply to sales and marketing activities.

Facebook:

Banks and other financial institutions are using Facebook to listen and to serve their customer base, as well as to make announcements.  

Twitter:

Banks and finance institutes are using twitter to share, listen, ask, and respond to their customers especially in the customer service realm. Another great usage would be to demonstrate thought-leadership and know-how.

 

LinkedIn:

The Finance industry is the 2^nd most active industry on LinkedIn. Typical usage cases involve networking, recruiting employees, spreading company culture, and to build relationships.

 

Foursquare:

Allowing check-ins to branch locations is the key area of use by banks. This allows the banks to give public shout-outs to returning customers. Some banks have even been using Foursquare to verify a client's location as a measure to prevent bank fraud.

 

 

Although it's obvious that social media can pay great dividends to banks and brokers, these financial institutions must tread lightly when integrating social media with sales and marketing efforts. A carefully crafted plan and strategy that adheres to FINRA and SEC standards and regulations is needed. All conversations and anything considered sales/marketing material must be recorded and archived in a manner that does not allow changes or edits in the event of e-discovery or audits for example. There are several other rules that govern messages that may be considered sales and marketing. To understand how financial institutes can reap social media rewards and how regulations like FINRA apply, I have put together a presentation that discusses this below via 10 easy-to-digest concepts and implementation tips.

 

 

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