FINRA and Compliance: Social Media and the Financial Sector

Financial institutions are using social media to create a competitive advantage and as a way to build their customer base. Let’s look at a few ways in which financial institutes are using the various social networks.

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

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

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

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

Although social media can pay great dividends to banks, these financial institutions must tread lightly when integrating social media. 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. To understand how financial institutes can reap social media rewards and to understand how FINRA applies to using social media, I have put together a great presentation that discusses this below.

If you want to know more about these regulations, read through FINRA Regulatory Notice 10-06 which can be found in its entirety below.

FINRA Regulatory Notice 10-06 Guidance on Blogs and Social Networking

If you want to dive in deep, have a look at this comprehensive presentation by one of the best, @JoyceMSullivan or @SocMediaFin at Social Media Week.