On April 1 2013, financial services companies in the UK and the US received clearer regulatory guidance about how to conduct social media activity than ever before.
In the UK, the Financial Services Authority (FSA) was replaced by a 'strengthened regulatory architecture' comprising two separate organisations. The Prudential Regulatory Authority (PRA) now regulates financial organisations to make sure they operate safely; the Financial Conduct Authority (FCA) is there to protect consumers. For the first time, there is significant guidance - an entire section of the FCA's handbook - on 'internet' and 'real-time' communications, which can be seen on the FCA's website.
In the US, the SEC issued further social media guidance to financial organisations. Companies are now permitted to post earnings and investment updates to Twitter and Facebook, as long as investors are told where to look in advance of the postings.
Another communication channel for bank customers
It seems that regulators on both sides of the Atlantic have taken the view that social media is another communication channel, rather than a new way of communicating. And yet less than three years ago, Thefinancialbrand.com published Why social media is a waste of time for most banks and credit unions, arguing that social media was useless for the financial sector. Some of the arguments then were that 'banking is boring', it was too risky, it was hard to do, and it was un-measurable.
So much has changed since then. As more of us turn to social media channels, banks - as so many other industries - have to respond over the channels that consumers choose to use to contact them. This is particularly true of younger customers, of course. There are some really interesting initiatives being taken by banks over social media, from Citibank using Twitter (@askciti) for customer service in the US, to HSBC running student bursary competitions on Facebook in the UK.
Changing customer behaviour
In light of these changes - both regulatory and in consumer behaviour - we have updated our guide to social media for financial organisations: Managing social media engagement for financial organisations, which is available from our website. Please note, this is not intended to replace legal or regulatory advice; each company should have their own detailed legal advice on how and when to engage with customers on social media, to be compliant with new FCA regulations.
Whether you use social media for customer service, research and development, customer insight, recruitment or CSR, I hope the guide will help financial organisations develop a practical approach to managing customers who want to communicate over social channels.