“We’re not sure we can, so we’d better not.” That’s what you’re likely to hear if you try to pursue a social media project in a pharmaceutical or financial services firm.
It’s because some industries have very specific regulations when it comes to moderating, supervising, and retaining electronic communications. And, when the rules were new, a “wait and see” approach might have made sense.
Now, though, more businesses want to use social media. There are more tools and practices to help address the regulations. And more firms are already using social media in compliant ways.
So, waiting on the sidelines while other firms capitalize on one of the biggest trends in a decade is no longer good policy. It’s irresponsible.
If your firm is still saying “no”, here are things you can and should do to get to “yes.”
Know the rules
Part of the issue is that too many people simply don’t know the regulations. Whether you’re in a business line or in IT, it pays to educate yourself. The material isn’t long or terribly complicated. In just a few hours, you can learn enough to eliminate most of the ambiguity. The policies you’ll need. The kinds of content you’ll have to pre-approve. The data you’ll have to archive.
And being able to quote “FINRA 10-06” will let the governing functions know you’ve done your homework.
Know the tools and practices
Since those rules first came out in early 2010, services have sprung up to meet the new requirements of regulated firms. Examples include new companies like Socialware, who “enable leading Financial Services companies to profitably build valued relationships.” (They recently enabled Morgan Stanley’s brokers to use LinkedIn to generate leads.).
Or Actiance, “enablers of safe and compliant use of unified communications.” They’re a more mature company (they were formerly known as “Facetime” until they sold the name to Apple). And they’ve been helping firms for years to handle compliance rules for instant messaging and other media.
While software services like these don’t address all the issues, they make it easier than ever for regulated firms to use social media in compliant ways.
Know the benchmarks
Perhaps the most powerful way to ease the minds of compliance and legal is to tell them “other banks have already done it.”
The governing functions might hate the idea of using Twitter, for example, to deal with customer complaints. But they’ll be mollified when they see how Citibank, BofA, Wells Fargo and others are already doing it.
Being able to point to a precedent gives them confidence that a compliant solution is possible. And they can always speak to vendors or to their counterparts at other banks to understand the details.
Strength in numbers: Connect the businesses + Prepare the case
With all this knowledge, you’ll still need to answer the questions: “What problem are you trying to solve?” and “What’s it worth?”
Too often, social media efforts shy away from these questions. They bemoan the difficulty of measuring ROI. (“What’s the value of a phone call?” they’ll ask.)
That’s a mistake. Like most legal and compliance issues, it’s all about managing risk. You have to offset the downside of introducing new electronic communications with measurable benefits (or with the political capital of your sponsor).
You further increase your chances by connecting different business lines that want to pursue similar initiatives. Say your case to use LinkedIn for recruiting isn't compelling enough. Then look within your firm to see who else could benefit and bring that aggregate case to the governing functions. They'll be more disposed to say "yes" if they see private wealth management and retail brokerage are also sponsors. (A prior post introduced the idea of an internal social media council that allows your firm to easily make just these kinds of connections.)
Simply put, your best tactic in getting approval is a strong business case and one or more strong sponsors.
Take a step
- 50% of investors with $1 million or more in assets are active on social media;
- Social media accounts for 1/3 of the time users spend online in the United States
So even the legal and compliance people understand the need to act.
If they’ve said “no” to social media in the past, it’s because they’re typically presented with projects that include real risks and costs but few specifics about the upside.
Change that. Do the necessary research, prepare the business case, and take a step.