This document discusses social media and financial technology trends. It provides an overview of social media best practices for banks, including engaging customers, responding to feedback, and complying with regulations. It also summarizes the fintech landscape and trends like serving millennials, peer-to-peer payments, business-to-business solutions, mobile wallets, and solutions for the gig economy. The document concludes with questions about these topics.

1. ©2014 Baird Holm LLP
Bank on Best Practices:
Social Media and Fintech
Jonathan J. Wegner
Baird Holm LLP
jwegner@bairdholm.com

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More Information
• http://www.slideshare.net/jonathanwegner/
• https://www.linkedin.com/in/jonathanwegner

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SOCIAL MEDIA
2018

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Defined
• Social Media: “a form of interactive online
communication in which users can
generate and share content through text,
images, audio, and/or video.”
– FFIEC Guidance

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#DeleteFacebook

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JP Morgan’s Epic Twitter Fail

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JP Morgan’s Epic Twitter Fail
• The good…

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JP Morgan’s Epic Twitter Fail
… the Bad…
• Did you have a specific
number of people’s lives
you needed to ruin before
you considered your
business model a
success? #AskJPM
• I have Mortgage Fraud,
Market Manipulation,
Credit Card Abuse, Libor
Rigging and Predatory
Lending. Am I diversified?
#AskJPM
… and the Ugly
• When Jamie Dimon eats
babies are they served
rare? I understand anything
above medium-rare is
considered gauche.
#AskJPM
• Does the sleaze wash off
with a regular shower, or do
you have to use something
special like babies tears?
#AskJPM

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JP Morgan’s Epic Twitter Fail

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So Where’s the Love?

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• Engage with your customers.
• Popular Posts from MidWestOne
– 80%: non-profit event and
project information
– 15%: financial education
– 5%: donations made by the
bank and awards received by
the bank
ICBA Top 50 in Social Media
Source: MidWestOne Bank website.

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ICBA Top 50 in Social Media
Source: World Retail Banking Report 2014

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• Use Social Media sites for education,
customer service, bank
announcements, and public service
announcements.
Using Social Media Channels

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• Negative
feedback will
happen
• Best practice:
Acknowledge
negative
customer
feedback
ASAP.
Using Social Media Channels

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Social Media “Command Centers”

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You still need "People Sense"

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You still need "People Sense"

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Social Media Compliance “Likes”
• FFIEC Social Media Guidance
– Adopt tailored risk management program.
– Identify, measure, monitor, and control the
risks related to social media.

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Social Media Compliance “Likes”
• Elements of Social Media Policy
• Governance structure
• Policies and procedures regarding the use and
monitoring of social media
– Methods to address risks from online postings, edits,
replies, and retention);
• Due diligence process, TPSP Management
• Employee training program
• Oversight process for monitoring posts
• Audit to ensure ongoing compliance
• Appropriate reporting parameters

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Unfriending Social Media
• Ads/Disclosures
– TISA/Reg DD
– ECOA/Reg B
– FHA
– TILA/Reg Z
– RESPA/Reg X
– FDCPA
– EFTA/Reg E
– MAP/Reg N
• Privacy
– UDAAP
– GLBA
– COPPA
– FCRA
– TCPA
• CRA
• Reputation Risk
• TPSP Risk Mgmt

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FFIEC Comments
• High Risk
– Integrating social media into customers’
online account
– Applications via social media portals
• Reputation Risk
– Comments by social media users
– Spoofing/phishing schemes
– Consumer complaints/inquiries

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FFIEC Comments
• Guidance does not require financial
institutions to monitor and respond to all
Internet communications other than
communications on sites maintained by or
on behalf of the institution

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FINTECH
2018

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Overview
• Financial Technology
– Customer Acquisition: Millennials
– P2P, B2B, Last Mile Payments
– Gig Economy

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Fintech Landscape - 2017

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Finance v. Technology
• Financial
– Conservative
– Capital Constrained
– Relationship Focus
– Costs
• Low Development
• High Deployment
– Intermediation
– Regulated
• Technology
– Disruptive
– Infinitely Scalable
– Process Focus
– Costs
• High Development
• Low Deployment
– Disintermediation
– Standardized

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Millennials
• Petal Card
– No Fees
– Thin-File/No File
– Mobile App

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Millennials
Reframe Savings as
Earnings
Automate Payments
Intelligent Savings
Bona Fide Offers

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Acorns
• Acorns
– Virtuous Premise
– Automatic Savings
– Set & Forget

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Regulation
• Custody of Funds
– Fintech Charter
• Varo Bank
– MTL Licensing
• Criminal Frontline
– KYC
– OFAC
– BSA/AML
– SAR Reporting

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Regulation
• Accounts
– Electronic Fund
Transfers Act
– Truth in Savings
– Check 21
– Durbin
• Securities
• Crowdfunding
• Lending
– Truth in Lending
– Equal Credit
Opportunity Act
– Fair Credit Reporting
Act
• TCPA
• GLBA

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Third Party Oversight
Regulatory Examination
Privacy
Information Security
Regulatory Compliance
Business Continuity
Personnel Compliance
Risk Allocation
Fourth Party Oversight

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OCC Fintech FAQs
Start-Up Relationships & Bank
Sponsored Products
Collaborative Due Diligence
Marketplace Lending
Compliance Management
Systems
Ongoing Oversight

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Moving Money
• Armored Car
• Checks
• Automated Clearing House
• Wire Transfers
• Payment Networks
• Blockchain

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P2P Solutions

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B2B Solutions

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“Last Mile” Solutions
Instant ATM Cash
P2P Transfers
Instant Rebates
Rewards & Incentives
Mobile Wallet Withdrawals

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Gig Economy
• Uber Checking by
GoBank
– 30% of Uber Drivers
lack checking
account
• Prepaid Card
Accounts

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Gig Economy
• Global Prepaid
Card Issuer
• Payment in Local
Currency
• Gig Economy ICs
• Commission
Payments

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Questions?
Jonathan J. Wegner
jwegner@bairdholm.com
(402) 636-8340