Welcome to the 21st Century. In the past 40 years the credit union movement has embraced technology to allow members access to ATMs, the automated clearinghouse network, and both online and mobile banking. And the advent of social media sites such as MySpace, LinkedIn, Facebook, and Twitter has opened new avenues for marketing and communication.
Social media uses Web-based technologies that allow you to access sites for information and social interaction. The social media phenomenon has given individuals and businesses the ability to reach both small and large audiences, and showcase expertise, influence opinion, and bond groups of like-minded individuals.
How big is it? There are, for example, more than 500 million active Facebook users.
Before you get started
Before launching any type of social media program, determine whether it fits your strategic plan and philosophy. Consider:
- The size and complexity of your credit union;
- The potential risks;
- Whether you have sufficient staff resources to manage the program; and
- A cost-benefit analysis.
Four areas of potential risk for social media use by credit unions include:
1. Legal risk. Possibilities include compliance problems, defamation lawsuits, copyright infringement, employment discrimination, and an easier way for attorneys to assemble class-action lawsuits.
2. Reputational risk. Poorly worded statements or a single typo can result in months, even years, of negative public opinion in cyberspace—and posted complaints can generate a bad image.
3. Regulatory risk. Since the advent of websites, anything published online that’s visible to the general public may be considered advertising subject to compliance mandates—just one of a host of potential regulatory pitfalls.
4. Security risk. Incoming and outgoing communications increase the risk of system intruders.
Numerous federal laws and regulations can affect the contents of your social media information and member interactions. For example:
- NCUA's security, advertising, and privacy rules;
- Truth in Savings Act (NCUA’s Part 707);
- Truth in Lending Act (Regulation Z);
- Children’s Online Privacy and Protection Act (COPPA);
- Electronic Funds Transfer Act (Reg E);
- Expedited Funds Availability Act (Reg CC);
- Fair lending laws (Equal Credit Opportunity Act, Fair Housing Act)
- Electronic signatures (E-Sign Act).
This brief list shows why it’s important to have adequate staff to manage and monitor your program. Staff also must periodically review with the board whether your social media policy is sufficient. And there may be other federal laws and state rules to be aware of as you launch into this brave, new world.
Credit unions also must maintain sufficient security controls and regularly monitor them. Conduct regular website reviews, information technology risk assessments, and system-intrusion testing.
- The importance and sensitivity of information that will appear on the site;
- The likelihood of outside break-ins and insider misuse;
- Risks posed by electronic connections with business partners; and
- Possible liability if things go wrong.
Next: A social media policy