Recently there has been a rise in the use of social media websites and networks for business purposes. Websites like Twitter, Facebook, LinkedIn, and Wikis have not just offered businesses new opportunities. There are challenges and risks which have come along with the opportunities. This is why; there is need for risk management strategies for financial institutions using social media.
Risk management strategies must be implemented to ensure best practice by any financial institution. Social media websites can be very porous and can make businesses vulnerable. The main purpose of using social media websites is to advertise and attract maximum customers. There is a lot of communication through social media websites and therefore more exposure to risks. This is why financial institutions need to employ comprehensive social media strategies as best practice. These strategies must be suitable for the requirements of the business and at the same time ensure risk management.
Here are some risk management strategies financial institutions can implement while using social media websites:
Implement a Corporate Internet Use Policy
Financial institutions must be clear about whether the employees can use the internet for personal use on social media. If they can use it, then there must be clear outlined limitations which they must be informed about. There must be a written internet use policy which employees in financial institutions must sign. Additionally, employees must be aware that violating the limits set will attract disciplinary action. For example, employees must not indulge in defamatory, harassing, posting copyrighted content, confidential and proprietary information. Ensuring compliance with policies is an essential best practice.
CISOs Must Be Vigilant
The main reason for introducing regulators is management of reputation, proper operation and liability risk management. The compliance and information security officers (CISOs) must make sure employees have a copy of the corporate internet use policy. There must be clear information on what is classified as confidential information to ensure best practice. It must specifically include non public personal information, any associated financial and product information data. Employees must make use of disclaimers when they post approved advertisements and information with reference to the financial institution. This is a recommended best practice for businesses using social media.
Use Marketing and Communication Strategies with Customers
Financial institutions must keep a conscious awareness about the tendency towards becoming very informal on social media. Customer communication means relating with customers directly to promote products and services. However, there is a thin line which must be respected in order to maintain a good reputation online. At the same time, there must be risk management at every level. Marketing strategies which are professional and not spontaneous must be implemented as best practice. Additionally, there must be systematic controls and compliance reviews to ensure best practice. These must monitor use of emails and other marketing and communication channels.
Trademark Protection and Brand Management
Usually there is a risk of phishing and spoofing schemes which can perpetrate businesses through social media. Fraudsters can pretend to be established institutions and create false profiles to divert attention to their web pages. The main challenge is to have a large number of followers and fraudsters go to any lengths to achieve their target. Therefore financial institutions must implement aggressive brand management and trademark protection strategies as a best practice. They should employ every means possible to monitor and detect potentially harmful use of social media. For example use of the federal trade statute and ICANN’s uniform domain name dispute resolution policy is recommended.
Risk management requires best practices at every level. At the same time compliance must be enforced to ensure successful and risk free use of social media.