6 Tips for Financial Service Companies on Social Media

An industry veteran shares his tips on how financial service companies can effectively use social media, despite the regulations.

Odysseas Papadimitriou is CEO of the personal finance social network, WalletHub and the credit card comparison website, CardHub. Prior to entering the world of entrepreneurship, Papadimitriou worked as a senior director at Capital One and oversaw the company’s credit card marketing program.
It took the Securities and Exchange Commission until April 2, 2013, to give publicly-traded companies the go ahead to disseminate official information to investors via social media. Think about that for one second, and keep in mind that the decision actually came 19 months after Wall Street was #Occupied.
That notion seems more and more quaint by the day, as banks navigate a minefield of irate hashtags like #TargetBreach, #BankTransferDay and #AskJPM, while social media continues to seep into nearly every corner of everyday life — from the Super Bowl to the State of the Union.
Not only were financial regulators late to the party, they are also living in the past when it comes to the burdensome social media restrictions they impose. By now, you know the rules. From employee training requirements to the procedures for compliance and oversight, these mandates must serve as the principles for the social media plan of any company operating in the financial services sector.
The challenge for financial institutions is figuring out a way to operate within the current regulatory framework, while also transforming their social media operations into a weapon for efficient customer service, brand management and crisis mitigation (rather than a ticking time bomb of liability). Just because you have one hand tied behind your back doesn’t mean you can’t do some damage, right?
Here are six tips to ensure that your company’s social media strategy packs a major punch.

Establish Goals, Identity & Voice

Your first objective is to establish a list of objectives that you wish to accomplish via social media. Otherwise, you’re flying blind.
Do you, for example, envision using social media more as a customer service mechanism, as a means of building brand awareness or as a way to drive sales through special offers?
Your company’s market position and stage of development will likely dictate your approach, but it is very important that your whole team embraces the purpose of your social efforts. That will promote a consistent voice as well as consumer clarity in terms of what your institution is all about. Why, for instance, does JP Morgan think it should be in the business of giving career advice? That’s an instance of an out-of-touch social media team muddying the brand waters and inadvertently fueling consumer criticism.
A clearly-defined social media identity will also serve as your roadmap to creating an efficient organizational structure.

Re-think Your Organizational Structure

The SEC has made clear its wishes concerning social media at the very top of a company’s leadership. This might feel like a burden but, in reality, it’s something you should’ve been doing already. The financial services industry is under a unique microscope when it comes to both regulatory scrutiny and public perception.
It is for that very reason that you want those at the top of your organization to be the ones setting the tone for your company’s social media program. It’s also why you want legal to be involved every step of the way — there are simply too many icebergs to dodge.
But the financial services industry is also unique in terms of the complexity of its subject matter, the accessibility of its products and the stakes that are in play. Consumers will never cease asking critical, nuanced questions about their finances and financial products, and trying to teach your entire customer service department to answer every type of question that might come their way is a fool’s errand.