The main focus of debates about social media is increasingly about the risks involved with its use. This is particularly true when it comes to large companies. Combined with the use of smartphones, social media is, for many, blurring the lines between work and private life in ways that are legally complex and difficult to control.
The social media transformation has accelerated to the point where companies need to find the balance between allowing freedom of expression on one hand, and exercising some control on the other.
Organisations increasingly need to put procedures and practices in place to manage their reputation. There are risks involved as they and their stakeholders set out to engage with the wider community in the social web.
As part of our research, we contacted 14 financial institutions in South Africa to find out how they manage social media. The financial institutions included banks, investment banks and insurance companies. Nine agreed to take part in the survey. We have not disclosed their identities as some of the information we were given was confidential.
The financial sector manifests the following distinguishing characteristics that warrant their investigation. It:
is services industry orientated;
involves high risk management;
operates in a competitive market;
is considered a highly people-driven industry;
values client retention and attraction; and
relies on building and maintaining client trust.
High levels of engagement
The financial institutions involved in the survey confirmed that they manage their social media exposure through formal internal social media policies. Six institutions shared their employee social media policies with us.
We read these in conjunction with the employee social media guidelines where these were provided. Guidelines were designed to provide additional assistance to staff. This helps them understand their role and responsibilities to the organisations when using social media and social networks.
The financial services sector has been under pressure to engage actively with social media and keep up with the times. The emphasis is not only on communication and networking, but also on making sure that social media is part of daily internal and external communications.
Managing risk is the biggest focus
Where the policy is located in an organisation is a clear indicator of which department has the strongest strategic interest in developing social media policy. It is also a sign that these departments have a larger stake in actively engaging and enhancing a company’s reputation.
The majority of the social media policies (50%) were under the risk section of the financial institution. Only 33% were in the marketing and public relations sections. For financial institutions managing risk is clearly the biggest priority.
A detailed analysis of the social media documents identified the following themes:
the majority (83%) focus on both risk and relationship building while 17% focus on risk only. Not one institution’s social media policy focus on relationship building only;
half (50%) made reference to brand, image and reputation while 17% focus on brand and image only;
all the documents (100%) directly refer to disciplinary action which enforces compliance; and
the majority (67%) offer both professional and personal guidelines in the use of social media.
The results show that the majority of financial institutions appreciate the value and opportunities provided by social media. It helps to establish and build a positive profile by engaging with external and internal stakeholders. At the same time, mitigating possible risks is equally important.
Compliance is taken seriously
The financial institutions ensure strict compliance with their policies.
Some organisations give staff detailed social media guidelines in addition to the formally approved policies. But staff do not always read the guidelines. To counteract this, some organisations provide staff with social media training. This is one way of ensuring compliance.
Financial institutions are clearly compliance driven and disciplinary actions were in place at all of those surveyed.
The emphasis on compliance is not only on communication and networking. It extends to daily operations with both internal and external communication. Thus the risks associated with social media are carefully managed at all levels in the organisation.
Financial institutions are taking the issue of managing social media seriously. In many respects they can be an example to other organisations. This is no guarantee that it will protect them from adverse commentary. But it is a necessary first step in risk and reputation management.