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Social Media in Financial Services: the Good, the Bad and the Litigious

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Social Media in Financial Services: the Good, the Bad and the Litigious

We recently collaborated with the leading law firm ENS to deliver seminars on the use of social media in a compliant manner in the financial services industry.  Read on for a quick synopsis of the main legal takeaway points and the benefits of social media policies …

Freedom of speech is not an absolute right 
 

Freedom is one of the most important pillars of democracy and we all value our freedom of speech highly. So, do employers really have the right to control the way in which employees communicate on social media? The answer to this question is a simple and resounding YES because we are all brand ambassadors for the companies we work for. If, for instance, an employee makes racist statements on social media, the smear will extend to his/her employer – a risk no company can afford to take.

It’s good to remember too that there is no such thing as a closed social media group despite your privacy settings. Friends share, their friends share even more, and in no time a controversial statement from a supposedly closed group can be on half a million phones.

D is for defamation
 

Even informed, mild-mannered folks can get angry sometimes…Which – in the online realm – can very swiftly and spontaneously lead to defaming someone. Defamation is a published false statement that harms the reputation of a person and can result in the need for financial compensation. This can become your employer’s responsibility if you made the statement during working hours and using the company’s equipment, including your phone.

There’s never a place to hate 

In law, hate speech is that which insults a person by race, gender, ethnic or social origin, colour, sexual orientation, religion, belief, culture, language, HIV status, nationality or gender identity. A broad and all-encompassing definition if ever there was one. Hate speech is soon to be criminalized which means a conviction could end you up behind bars!

Thou shalt not steal images
 

Many people mistakenly believe that everything on the internet is in the public domain, including all images. This couldn’t be further from the truth. A quick copy and paste from a news site onto your Facebook page could easily constitute theft.

Who’s afraid of the big bad FAIS?
 

FAIS was one of the biggest topics of discussion in the seminar, for a number of reasons.

  • FAIS states that you’ve always got to behave in a manner that shows you take managing their money seriously. So, photos of you in the bar after a few too many are not appropriate. If in doubt, don’t post…you wouldn’t want to put your license to practice in jeopardy.
  • FAIS governs the suitability of Advice on social media. Social media is simply never the place for Advice. There is no way that you can have insight into a person’s full set of financial circumstances after a couple of posts. Even more dangerously, any advice you post could be shared, shared and shared again. Just remember what happened to Tim Noakes.
  • FAIS regulates the appropriate timing of marketing communication. There’s no way you can time information that is spread organically (i.e. not by paid advertising) across social media platforms.
  • If you share an investment strategy from one of your suppliers, you need to be prepared to stand behind it as your own. For instance, you could be sued for loss if one of your Facebook friends used the strategy and lost money.
     

Beware big data analytics 
 

Big data analytics is increasingly used in the financial industry for building predictive models for marketing (and other) purposes as it allows individualistic communication with users based on their previous search histories. However, this information can become personalized and could get you into trouble when used for marketing purposes, including cross-selling.

Fret not!  The solution lies in a social media policy 
 

Social media policies should form part of an employee’s contract and exist to protect a company’s brand and reputation and to manage the company’s liability should things go wrong. Remember that an employee’s social media activity can’t be questioned if there’s nothing to measure it by. A social media policy sets the standard.

A social media policy should cover/include:

  • A list of people who are authorized to speak on behalf of the company on social media platforms
  • How you plan to protect your company’s information including customer’s details
  • Can business equipment be used for personal social media use and are employees allowed to be active during office hours (even if using their own devices)?
  • How your company’s trademarks can be used. (Are your employees allowed to use the company logo on their linked in pages, for instance?)
  • What are acceptable methods for business communications? (For instance, are business Whatsapp groups acceptable considering the casual nature of such groups?)
  • How to project your company’s values including its ethos
  • General educational information about the risks including posting defamatory statements, infringing copy and trademarks, making anti-competitive statements and breaching confidentiality and security
     

Related: Does Your Financial Services Brand Have Soul?

Social media policies aren’t there to scare off employees. They’re useful guidelines which allow all parties to mitigate potential risks while also making the most of the incredible marketing opportunities presented by social media.

The final word
 

Remember that all leading brands (including financial brands) are social, digital and inclusive! If you’re not on social media you run the risk of being seen as out of touch…or out of business!  More and more people search for information directly from social media platforms, rather than using search engines like Google and Bing.

Fincommunictions is a specialist financial marketing business.  We employ financial writers with full knowledge of the law and leading creative writers who ensure that all communication is engaging, emotive, and entertaining. We tick both boxes by ensuring that your brands is always on the money but never boring.

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