It is fair to say, that financial services firms have been slow to adopt the use of social media. The vast regulation that surrounds the industry is a big deterrent, with many marketers holding back from really going for it on social for fear of falling foul of the Financial Conduct Authority (FCA) rules.
But is it actual regulation that is holding back marketers in this sector or is it self-regulation and the internal compliance department?
It is exactly this issue that I discussed as a member of a panel organised by the Social Media Leadership Forum joined by a representative of the FCA and Managing Editor of the Financial Times, Andrew Hill.
The session was designed to prompt an open discussion between financial services peers about what the constantly changing social media landscape means for them and the companies they work for.
But what fell out of it is that marketers themselves are scared of embracing social media. On a show of hands in the room, only a couple of attendees said they were not scared about using social media. Quite surprising given social media or ‘new media’ is no longer ‘new’.
So what is holding back the industry? In part, it is waiting for the FCA to publish its updated social media guidance, the first update since 2010. The FCA confirmed on the day that the guidance initially due out at the beginning of the year will now be published in August. But for those holding their breath for a step by step guide to what you can and can’t do on social, don’t.
After the guidance is published, the FCA has said its social media proposals will be followed by a 3-month consultation process, because in the words of the FCA, it wants it to be a “two-way dialogue”.
So what exactly did the FCA say about social media and how the industry should approach it?
On social media generally, senior associate at the FCA, Richard Lawes said: “The FCA can see positive benefits from using social media but there is an element of compliance. Primarily, customers must be at the heart of your business.”
Talking specifically about social platforms he said: “We are aware of the twitter space constraints and aware different media have different constraints, such as billboards, radio, TV. You should frame your message and content to the medium you’re using.”
“Think if the content or message is appropriate to that medium. Use the medium that allows you to be compliant.”
On getting it wrong: The FCA pointed out thatas of yet no fines or action has been taken against any financial firms by the watchdog for its social media activity. Yes, the FCA is watching but that after all is its job. In the first instance the FCA said if it spots social activity which is non-compliant it would initially contact the firm in question to remove or amend the breach. According to the FCA, only those firms which do not cooperate or ignore the FCA’s warning would be subject to further action.
While the FCA would not expand on what would and wouldn’t be included in its guidance, I got the distinct sense that the guidelines will not provide the hand-holding the industry seems to require to enable it to really embrace social media. Instead they will be high-level and open to interpretation.
My biggest take-out from the day is that the FCA does not want to be prescriptive about social media and is looking for firms to lead the way in embracing it.
From what the FCA said on the day, financial services firms may have less to fear about social media than they think.
Don’t just sit on your laurels waiting for the FCA guidance to make sense of social media for you. Embrace it now, ensuring you keep the customer central to all that you do and you shouldn’t go far wrong.
Written by Sharon Flaherty, Founder of BrandContent