No one can escape the growing frenzy of today’s social media movement.
According to a recent report from Javelin Strategy & Research, 52% of U.S. adults with online access spend time on networks such as Facebook and Twitter, and about 40 million Tweets are processed daily.
As these numbers continue to grow, most credit unions are paying social media the attention it deserves, realizing it’s time to “get on board” or risk giving competitors a marketing edge.
However, as with any member communications, credit unions must take proper compliance precautions.
The Financial Industry Regulatory Authority (FINRA) has issued Regulatory Notice 10-06 [pdf], which provides information on the responsibilities of financial services firms to supervise the use of social media sites.
The Federal Financial Institution Examination Council’s IT Handbook Infobase also offers insights into this subject. It outlines strategies to support any new technology that a credit union considers implementing.
Auditors are asking credit unions about their social media policies, so the writing is on the wall regarding what eventually will be expected as social media continues to grow in popularity.
Examiners want to see a top-down approach to planning, including involvement from the board of directors to review and approve procedures.
That said, senior management must be involved from the beginning of the planning process to both mitigate risk and ensure their credit union’s social media strategy aligns with the institution’s growth initiatives.
When developing a comprehensive and compliant social media program, ask nine questions:
- What standards will apply to social media use by employees (for personal and business use)?
- Which social media sites will be used (Facebook, Twitter, etc.)?
- Will the social media site be configured for one-way communication, or will it allow the public to comment on and respond to the content?
- Who will have the authority to post credit union information?
- Who will approve the content?
- How often will the social media site be updated and reviewed?
- Will blogging about credit union matters be permitted?
- Will employees be allowed to post pictures taken at work?
- How will record retention be handled? Will an automated solution be used?
Because social media has unique risks, assess the potential strategic, legal, compliance, operational, and reputational implications of social media communication.
Consider designating an internal social media “champion” to spearhead internal collaboration. Third-party vendors can also help credit unions address compliance and stay aware of the latest regulatory changes.
Overall, social media opens up a new channel for credit unions to communicate directly with members. It may prove to be an important part of the credit union movement, enabling institutions to maintain close member relationships even as branch activity dwindles and more business is conducted online.
The most critical aspect of building a social media strategy is to ensure that it fits into a credit union’s overall communication strategy. A social media program should meet the needs and interest of current members and attract potential members, boosting credit unions’ ability to grow business.