Social Media Risks and Rewards

A hot topic of our times is how to make the best use of social media. To start, you must understand the terms.

“Media” means methods of communication—whether for social or business reasons—typically between people in different locations and not involving a face-to-face meeting. The communication can be for social, business, or other purposes, and can be anything from one-way communication to multidirectional, real-time interaction.

Media include:

• One-way print and broadcast formats—such as newspapers, magazines, radio, and television;
• Conventional time-honored forms of social media—such as telephone communication and postal mail; and
• Multidirectional expanding forms of Internet and social networks—such as Facebook and Twitter.

Web 2.0 interaction, collaboration, and sharing—spurred at least in part by the advent of blogging—have moved Internet use beyond simply a one-way delivery of information.

Websites provide a wealth of information about businesses and individuals. But before blogging and chat, the electronic avenue to providing thoughts, opinions, and information requests in response to content on websites was through e-mail. While it offers interaction, e-mail has limitations and lacks many features of newer social networks.

Blogging and chat, when introduced, became popular, immediate, and active methods of socializing, with features e-mail didn’t have. While bloggers and texters can share pictures and video remotely, they also share with e-mail the benefit of not needing to be in the same physical location at the same time, but rather in a shared virtual location.

Businesses soon discovered that using social media allowed them to interact with consumers of their products and services. Social media allows them to provide greater service and more useful information in response to that interaction, and to create communities of people similar to those that exist purely for social interaction.

There are, however, perceived and very real dangers in using social media, including:

• Reputation risk. What your members say about the credit union on social networks can spread virally and might require a quick response by the credit union.
• Productivity risk. Employees who have access to the Internet and social media sites can be tempted to spend significant amounts of time on these sites. A social media policy helps guide them in appropriate use.
• Security risk. Both incoming and outgoing messages introduce risk. Employee education and technical safeguards, such as antivirus software, can reduce these risks.
• Discrimination risk. Using social media as a source of information about job candidates and to monitor employee postings can lead to discrimination claims. Experts often suggest you designate third parties to handle these tasks.
• Compliance risk. Employees’ mention of products in social media, even casually, might require a disclosure statement to comply with regulations.

Social media use can also yield many rewards, including:

• Branding. Your credit union can take its website to the next level—providing not just a brand or information, but also a personality that interacts with members and the community.
• Building relationships. Social networks have fans, followers, and friends who participate in discussions. They become more attached—hopefully leading to stronger and deeper commitments and relationships with the credit union.
• Creating community. While select employee groups provide a sense of community and interest in a credit union and its products and services, social media can assist in this effort.
• Saving money. Social media provides access to audiences your credit union might otherwise access only through more expensive methods, or perhaps not at all.

If you don’t adopt social media strategies, you risk losing an advantage and possibly even marketplace legitimacy. Credit unions must deal with the risks, embrace the rewards, and actively participate in the burgeoning world of social media.

ROBERT REH is chief information officer at Nassau Financial FCU, Westbury, N.Y., and vice chair of the CUNA Technology Council. Contact him at 516-240-1257. For more information about CUNA Councils, visit cunacouncils.org.