Absolute Consult presents:                              “Social Media Compliance”Social networking is gaining rapid adopti...
Lecturer’s ProfileMr. Acevedo has 20 years experience as a practitioner in financial services. He possesses broad anddeep ...
Why should I care about social media?It has just about supplanted traditional media in terms ofreach…did you know that the...
What IS Social Media?Blogs, social networks, community-specific websites, and  photo/video sharing platforms
Business-Consumer InteractionThenNow
Social Networking Sites Estimated to be more than 250 active (100,000 visits per day ormore) social networking sites in Pa...
Top 5 SocialNetworkingSites
HUMAN connection andRELATIONSHIP BUILDING are what social media is all about
Designing a Social Media Compliance regime
Why do you need a Social Media Policy?•To protect yourself…there are policies about sick and personal days,workplace attir...
You need to:                                           Your employees!• Internal guidance is critical, though! •Social med...
Weeks and MONTHS in advance….
Basic Precepts• No one outside the social media practitioners (Marketing, public relations, etc) may  use Social Networkin...
Best approachDon’t write a rule or process for every single social network, every possible type of interaction youhave wit...
“Work” vs “Private” Social MediaEmployees and management have to understand thatsocial media blurs the distinction between...
Practical Example•Your company has just closed asignificant contract with the governmentof China•Your project manager runs...
“Global” vs “Local” StandardsNot everyone is going to want to adopt "American"standardsAn organizations approach to social...
Social Media policy also needs to…Be positive and proscriptive – focus on what employees CAN do, instead of beingnegative ...
What should you do about privileged         information and avoiding giving advice?Your social media policy needs to addre...
Trust employees, but not everyone should         speak for the companyBe careful about who exactly will be the ambassadora...
Who should enforce it?The person who is in charge of your social mediaefforts and your legal department or compliancerepre...
Let’s be clear on responsibility Social media often gets inaccurately blamed for violations of company policy or mistakes ...
What if people spend too much   time on Social Media?When this happens, work suffers. The social mediadirector, employee’s...
Assign Responsibility and be Accountable     Department                   Pros                                   Cons     ...
Who should NOT be in chargeLegal, IT or compliance departments  Legal: May take days or even weeks to answer a single  twe...
The Ideal Setup A ‘committee approach...select one or two people from each dept toserve. Put the committee in charge of yo...
Social Media Management is for Senior Staff,                 NOT internsEven though younger employees might be whizzes at ...
Who are the Social Media Practitioners?They come from marketing, PR and Sales:  Used to dealing with the public  Generally...
What if your employee becomes a Social              Media rock star?   Such individuals become more attractive in the job ...
The Models of Social Media Management Decentralised: no one department manages or coordinates the social media efforts. Ea...
Sample Social Media Tree
Hold your Team accountableAs with any other business related undertaking, you need to plan,coordinate, and measure results...
Social Media AuditIt is imperative to do a social media audit so every organisationunderstands what social media their emp...
Financial Services-specific issues
Extra-TerritorialityThe operation of laws upon persons existing beyond thelimits of the enacting state or nation but who a...
“The West” has taken the lead on   addressing some of these nascent issues•SEC already has extensive regulations to preven...
FINRA http://www.finra.org/industry/issues/advertising/p006118“…Social networking sites such as Facebook, Twitter and Link...
Blogs and Bulletin BoardsBlog and bulletin board postings by an RR are typically static communications. Aswith all adverti...
RRs Must Contact their Compliance DepartmentFirms are responsible for supervising the business-relatedactivities of RRs in...
Linking to Third Party WebsitesLinking to other sites raises concerns because thesesites may contain misleading or incorre...
Other FINRA guidancehttp://www.finra.org/industry/issues/advertising/p006118http://www.finra.org/web/groups/industry/@ip/@...
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Social media compliance

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Social Media Compliance

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  1. 1. Absolute Consult presents: “Social Media Compliance”Social networking is gaining rapid adoption by business professionals to increasebrand awareness, client prospecting, and customer retention and loyalty.85 percent of financial services professionals under 50 are using social media! As thiscommunication channel matures, these numbers are sure to increaseThis trend carries with it a wide array of legal risks, and as such requires the samecompliance principles that govern e-mail and IM retention — this extends to tweetsand LinkedIn profilesWhether your firm allows social networking or not, employees are using these sites tohelp them build business, leaving the company open to compliance violations.Therefore, it is essential to ensure company internal policies and archiving systemsextend to these channels to remain compliantThis presentation covers basic guidelines for ANY type of business, with real worldexamples along with the consequences of getting social media wrong www.absoluteconsultgroup.com
  2. 2. Lecturer’s ProfileMr. Acevedo has 20 years experience as a practitioner in financial services. He possesses broad anddeep Global buy side Compliance, Operations and Risk Management experience in large and smallorganizations, notably at Morgan Stanley Investment Management.He has created operational support processes from scratch in startup environments and beenresponsible for all operational aspects including month end NAV reconciliation and administration ofonshore as well as offshore structures.He is currently a Part-time lecturer at Singapore’s Nanyang Polytechnic, in the School of BusinessManagement.EDUCATIONPace University, New York, USAMaster of Business Administration - International EconomicsSt. Johns University, New York, USABachelor of Science – FinanceInternational Compliance Training Academy, SingaporeDiploma in Compliance
  3. 3. Why should I care about social media?It has just about supplanted traditional media in terms ofreach…did you know that the death of Osama Bin Laden inMay 2011 was actually first made public on Twitter?
  4. 4. What IS Social Media?Blogs, social networks, community-specific websites, and photo/video sharing platforms
  5. 5. Business-Consumer InteractionThenNow
  6. 6. Social Networking Sites Estimated to be more than 250 active (100,000 visits per day ormore) social networking sites in Pacific region - Across languages, topics and either integrated into major portals or separate.
  7. 7. Top 5 SocialNetworkingSites
  8. 8. HUMAN connection andRELATIONSHIP BUILDING are what social media is all about
  9. 9. Designing a Social Media Compliance regime
  10. 10. Why do you need a Social Media Policy?•To protect yourself…there are policies about sick and personal days,workplace attire, and workplace safety…•There also needs to be a policy about how your companycommunicates with the outside World
  11. 11. You need to: Your employees!• Internal guidance is critical, though! •Social media doesn’t violate company policy; PEOPLE violate company policy
  12. 12. Weeks and MONTHS in advance….
  13. 13. Basic Precepts• No one outside the social media practitioners (Marketing, public relations, etc) may use Social Networking on behalf of the company• Everyone can communicate on behalf of the company using social media, but needs to go through a special certification and training course first• Create a policy that establishes guidelines for how employees can use and enjoy social media…and spell out the consequences for moving beyond those guidelines• Do not start from scratch…leverage your existing code of conduct and compliance manual. This tells employees what sorts of behaviour you expect from them and what kinds of things they are allowed to say and share and what kinds of things they need to keep secret or not say. Then create different policies (or sections) that deal with different facets of social networking
  14. 14. Best approachDon’t write a rule or process for every single social network, every possible type of interaction youhave with customers, and the types of things you are allowed or not allowed to say. Leave it asgeneral as possible, referring to “social media” and understand that it means any and all socialnetworks and bloggingIf you do it right, your code of online conduct should cover the overall best practices of onlinecommunication without getting into the fine details of each and every networkCreate your overall code of online conduct , and then add new sections or specific policies as theneed arisesBase your policies on need and actual usage (experience). Don’t write them well in advance to coverthat one instance that might or might not ever happenAs time goes on and the need further arises, create separate policies (or sections) on both thepersonal and company usage of Blogs and blog commenting Facebook Twitter LinkedIn YouTubeThey should focus on best practices and general guidelines, just like the online code of conductPolicies need to include information about how, or even whether, employees may represent thecompany on their personal networks
  15. 15. “Work” vs “Private” Social MediaEmployees and management have to understand thatsocial media blurs the distinction between work life andprivate lifeAn employee can create a LinkedIn account which showstheir company, their job description and their privateactivities, some of which might be problematic to clientsor colleaguesOwnership – who owns your content if an employee sendsa tweet or writes a blog post?What can employees do at home?
  16. 16. Practical Example•Your company has just closed asignificant contract with the governmentof China•Your project manager runs a websiteand/or has something like thisplastered all over his social mediapresence:
  17. 17. “Global” vs “Local” StandardsNot everyone is going to want to adopt "American"standardsAn organizations approach to social media and socialmedia compliance will vary according to their culture andobjectivesThere is no "one size fits all“Organizations need a "global standard" but can have "localstandards" for each market they operate in
  18. 18. Social Media policy also needs to…Be positive and proscriptive – focus on what employees CAN do, instead of beingnegative and restrictive, detailing everything employees can’t do. That doesn’t meanyou can’t have anything negative in it, but the overall tone needs to be positiveDiscuss consequences for violations – people have been fired for things they saidon social media channels, regardless of how ill-advised the firing might have been.Your social media policy needs to avoid any confusion and surprise by stating upfront what will happen if policies are violatedRemind people to be authentic – at the end this is what social media networkingall aboutEncourage people to be on their best behaviour – even when they are onlineduring personal timeRemind people to do their jobs – time spent on social media is for work purposesonlyRemind people to maintain privacy – Never discuss specific customers, share theirproblems, and definitely don’t link to them unless you have their permissionSpell out who is responsible for making final decisions about issues that havenot been covered
  19. 19. What should you do about privileged information and avoiding giving advice?Your social media policy needs to address what is consideredprivileged information or professional advice, and what things you canand cannot discuss on a social network. For example: Customer complaints: “I’m sorry, we can’t answer any questions on Facebook because of privacy. I realize it’s inconvenient, but could you call our main number and explain your situation? They will be able to connect you with the right department” Someone writes a comment to a FaceBook page with a legal or medical problem “I’m sorry, I’m not able to answer that question directly. I don’t have enough information to give you the best answer, and don’t want to give you the wrong answer. You could make an appointment to see me, and I can help you” A relative of a patient or client sends you a message on Facebook mail, asking about his relative’s case….you can’t share any information over the phone and definitely not by email, FaceBook, Twitter, blog posts, etc…a simple “I’m sorry, I’m not able to discuss that” will do
  20. 20. Trust employees, but not everyone should speak for the companyBe careful about who exactly will be the ambassadorand public face for your company on socialmedia…some people are just not qualified to fulfillthis role
  21. 21. Who should enforce it?The person who is in charge of your social mediaefforts and your legal department or compliancerepresentative, or both
  22. 22. Let’s be clear on responsibility Social media often gets inaccurately blamed for violations of company policy or mistakes made by its users Socia Media is no more to blame than other forms of media (text, email, snail mail, TV, etc) If your employees make a mistake on a social network, it does not mean your company should go run and hide from the social network It means the company should do a better job of educating and empowering its employees to use the networks appropriately
  23. 23. What if people spend too much time on Social Media?When this happens, work suffers. The social mediadirector, employee’s supervisor, or both will need tostep in and have a discussion individually…deal withthe distraction the same way you would with anyother workplace distraction
  24. 24. Assign Responsibility and be Accountable Department Pros Cons Most likely to blast unwanted Understands how to create a commercial messages. Not persuasive message, know how to experienced at solving customer measure ROI, is most willing to try problems. Easily distracted by other out new tools. Used to speaking to new tools. Can easily slip into Marketing customers in their own language Marketing jargon Consummate networkers who are likely to embrace social media if it Most likely to avoid social media if helps them avoid the phones. Also they dont see immediate results. more likely to use social media to Also likely to try blasting commercial build relationships with potential sales messages in pursuit of quick customers. This helps them avoid results. May be a new way of Sales their customers gatekeepers thinking for old school salespeople Most appropriately trained Dont usually think in terms of sales employees to deal with real-time and ROI, but in reads, listens and communications, speaking on behalf views. Must be careful not to look of the organization, and building down on small-time bloggers and PR relationships with customers social media practitioners Not experienced in writing persuasive marketing messages or using sales techniques. Might not be Customer Experienced at handling customer trained to follow up on sales and Service complaints and problems marketing questions
  25. 25. Who should NOT be in chargeLegal, IT or compliance departments Legal: May take days or even weeks to answer a single tweet…not accustomed to a real-time response/interaction IT: Not equipped to deal with customer service/sales/marketing/ issues OR talking to ‘media’ types
  26. 26. The Ideal Setup A ‘committee approach...select one or two people from each dept toserve. Put the committee in charge of your social media efforts. Becareful, though: Dont make this a democratic committee where everyone has an equal vote...such a process will lead to paralysis and no final decision Put one person in charge of the entire social media effort (everyone else can make recommendations and give input) A social media committee can also serve as a clearinghouse for the different departmental functions
  27. 27. Social Media Management is for Senior Staff, NOT internsEven though younger employees might be whizzes at Twitter andFacebook, they dont: Necessarily know how to create an extended strategy Have experience responding to customer complaints Understand how to market and sell enough to be able to do it effectively online Even know how to calculate the ROI and do basic market researchBy using a more experienced employee, your are able to draw ontheir real-world, full-time work experience. They can recall similarsituations, understand the gravity of what they are doing, and haveexperience building and executing campaigns, measuring theresults, and speaking with customers with a sense of purpose andcompany mission
  28. 28. Who are the Social Media Practitioners?They come from marketing, PR and Sales: Used to dealing with the public Generally outgoing and easy to get along with Used to multitasking and can manage the sometimes fast pace of social networking and conversations Tend to be more social in nature and view these online networks as extensions of their real-world connections, rather than a replacement or substitute for it
  29. 29. What if your employee becomes a Social Media rock star? Such individuals become more attractive in the job marketplace and potentially put your company in the position of allowing them to build a personal platform, only to leave Best way to consider this employee is as one more marketing channel - one more way to get the word out about your company. These mentions and appearances can lead to increased awareness for your company, which can lead to more sales Concern most companies have is that the employee is not going to be able to get their work done, will get an unmanageable ego, or will be recruited by another company and hired awayThe best advice in this scenario is: Let your employees shine, rather than trying to hide their brilliance. Let them be the voice and face of your company and let them become rock stars. If they feel like you’re giving them a chance to be awesome and to spread their wings, they’re more likely to work harder to earn that trust and belief in what they’re doing. That can only to bigger and better ideas from them, more exposure for them, and ultimately, more exposure for your company.
  30. 30. The Models of Social Media Management Decentralised: no one department manages or coordinates the social media efforts. Each department does its own thing without any guidance or coordinating clearinghouse. The departments may collaborate with each other Centralised: Puts one department, like corporate communications, in charge of managing all social media efforts. Benefit is that the messaging is centralised and consistent. Downside is that other departments might have a tough time responding to customers Hub and Spoke: Means that several cross-functioning teams report to one centralised position. These teams can be different individuals or business units. The cental point monitors all the channels and assigns tasks to the appropriate department or person, who would then respond appropriately. Multiple hub and spoke: Similar to previous, but used with larger companies and multinationals with different locations Holistic: Ultimate TRUST in your employees….means that everyone has the ability to communicate on social media. No one person is in charge, and everyone has “the keys to the car.”
  31. 31. Sample Social Media Tree
  32. 32. Hold your Team accountableAs with any other business related undertaking, you need to plan,coordinate, and measure results: Clearly define Goals Come up with measurable objectives Strategy: create a blueprint or road map…identify your audiences, where they are online, and the needs you can fill for them. Then delineate which channels you’ll use, how they will integrate, and what calls to action or drivers you will push in each one. Map out a content strategy for the channels you choose and build milestones in to continually measure and optimise your efforts Tactics: These are the steps taken to implement the social media strategy. Specific topics and messages are formulated here into blog posts, facebook invitations, etc. Basically, these make up your ‘to-do’ lists
  33. 33. Social Media AuditIt is imperative to do a social media audit so every organisationunderstands what social media their employees use and howThe audit should be repeated regularly because social media isdynamic
  34. 34. Financial Services-specific issues
  35. 35. Extra-TerritorialityThe operation of laws upon persons existing beyond thelimits of the enacting state or nation but who are stillamenable to its laws
  36. 36. “The West” has taken the lead on addressing some of these nascent issues•SEC already has extensive regulations to prevent various schemes. Since socialmedia is merely a NEW channel of communication/distribution, the spirit of theserules applies to social media as well•If you “Tweet” about a NYSE listed company from anywhere in the World, youare caught in the US regulatory need and thus need to be aware of regulations inthat jurisdiction
  37. 37. FINRA http://www.finra.org/industry/issues/advertising/p006118“…Social networking sites such as Facebook, Twitter and LinkedIn usually have static and interactive content. Static content like a profile, background or wall information is usually considered an “advertisement.” Static content is generally accessible to all visitors and usually remains visible until it is removed. As with all advertisements and sales literature as defined, a registered principal for the firm must approve, prior to use, all static content. Interactive content includes real-time extemporaneous online discussions with unrelated third parties such as in a chat room. Chat room or other content posted in an interactive electronic forum is considered a public appearance. Similar to extemporaneous discussions by an RR at a public appearance, interactive content does not require prior principal approval, but must be supervised
  38. 38. Blogs and Bulletin BoardsBlog and bulletin board postings by an RR are typically static communications. Aswith all advertisements and sales literature as defined, a registered principal for thefirm must approve all static content. Blogs may also feature interactive content,where a third party posts a comment in response to the initial blog and then theblogger responds to the third party comment. Such interactive comments by theblogger are considered to be public appearances. Similar to extemporaneousdiscussions by an RR at a public appearance, the interactive content does notrequire prior principal approval, but must comply with the content standards of theadvertising rules and must be supervised by the broker dealer.Since interactive content in social networking sites and blogs is considered a publicappearance, RRs must follow the same requirements for participating in theseforums as they would if they were speaking in person before a group ofinvestors. There are no filing requirements, but RRs are accountable under FINRArules and the federal securities laws for what they say. Like all publiccommunications, interactive electronic postings must be fair, balanced and notmisleading.
  39. 39. RRs Must Contact their Compliance DepartmentFirms are responsible for supervising the business-relatedactivities of RRs including participation in these interactiveforums. The rules apply regardless of whether an RR is in theoffice, at home, on a public computer or using a personal device.Because of the difficulties of supervision and the potentialliabilities from participating in these forums, many firms limit orprohibit participation in certain on-line media. Accordingly, RRswho are considering communicating in a social networking site,chat room, bulletin board or a blog, should contact theircompliance department to determine whether such activities arepermitted and what procedures may apply. Regulatory Notice 11-39 provides further guidance on accessing social media sites frompersonal devices
  40. 40. Linking to Third Party WebsitesLinking to other sites raises concerns because thesesites may contain misleading or incorrect information.An RRs web site should not have a link to a site thathe/she knows or has reason to know contains false ormisleading content (see Regulatory Notices 10-06 and 11-39). RRs should exercise the same care inchoosing links as they would in referring customers toany outside source of information.
  41. 41. Other FINRA guidancehttp://www.finra.org/industry/issues/advertising/p006118http://www.finra.org/web/groups/industry/@ip/@reg/@r ulfil/documents/rulefilings/p125330.pdf

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