Pub. 11 2014 Issue 3

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S 12 Why You Need Social Media Policies and Procedures Although social media is a relatively young force within U.S. culture, it has transformed the way businesses operate. As a result, no company can afford to neglect social media when it comes to conducting business, especially in advertising and marketing efforts. Even though banks and credit unions are of- ten conservative, and are perhaps slower to jump on cultural bandwagons than some other industries, the time for holding back from this particular trend is now over. Most companies have an online website; most employees, especially manage- ment, are likely to use smart phones and tablets and will usually have accounts on major social media websites such as LinkedIn, Twitter, and Facebook. In short, you really do need to have pol- icies and procedures ready to provide much-needed guidance about social media usage for management and staff. The first step is studying what the experts have to say on the subject. Several guidelines are available: • The Federal Financial Institutions Examination Council (FFIEC) published a Financial Institution Letter report on December 11, 2013. • The Financial Industry Regulatory Authority (FINRA) pub- lished Regulatory Notice 10-06 in January 2010. • The Federal Trade Commission (FTC) published “Guides Concerning the Use of Endorsements and Testimonials in Advertising” in October 2009. All three of these documents are relatively short and may well be worth your time to read. The FFIEC document and the FTC document are both 12 pages for example, and the FINRA doc- ument is 10 pages (with the last bit of text appearing on page 9). The following sections provide a brief summary of the main points. FFIEC The FFIEC document has the following purposes: • Helping you to understand and manage the risks of social media. • Educating you about your responsibilities under current re- quirements. Specifically, FFIEC has made it plain that con- sumer protection laws and compliance laws and regulations apply to activities conducted through social media for finan- cial institutions. • Reminding you that you have a responsibility to address the risks associated with activity on social media. • The FFIEC document does not contain any new require- ments to be followed. It is organized as follows: • Purpose: Industry participants asked for this guidance be- cause they wanted to know what the members of the FFIEC would suggest for creating appropriate risk management programs. Final responsibility lies with U.S. financial insti- tutions, not with the members of the FFIEC, but this doc- ument contains the current advice and recommendations from the FFIEC and has been adopted by its member agen- cies. The New Social Media Guidelines By Susan Morgan, The newsLINK Group