How Highly Regulated Industries Can Best Use Social Media
For highly regulated industries, such as pharmaceuticals, various medical professionals, insurance, and financial services, a company’s desire to participate in social media and reap its benefits must be tempered with the demands of regulations. Trade secrets, patient privacy, and even insider trading can be considerations. But social media has numerous benefits, including faster communications with clients, and client education. What’s a highly regulated industry to do?
Every company (and not just those in highly regulated industries) should nail down their domain name and its variants, plus variations on the theme of ___sucks. And not just for domains; those should also be reserved as usernames in every single social media platform that springs up, even those where the typical user does not fit the company’s buyer persona. That is, even if none of these platforms or domains are used, they should still be locked up.
Let’s say the company is Consolidated Financial of Winnipeg. As of the writing of this blog post, this isn’t a real company. Consolidated will need to take ownership of, and squat on –
- Facebook page Consolidated Financial of Winnipeg
- Facebook group Consolidated Financial of Winnipeg Sucks
- Twitter handle ConFinWinn
Plus any number of variations on these themes.
Before this company does anything else, they need to investigate what the applicable regulators say. FINRA regulates a number of Canadian firms doing business in the United States. The SEC then oversees FINRA, so their rules are also applicable, even though Consolidated isn’t located in America. According to the Social Media for Regulated Industries Whitepaper, FINRA provides guidance in the areas of recordkeeping, suitability responsibilities (e. g. firms can’t promise anything through social media that they can’t promise via more traditional media), types of interactive electronic forums (active conversation doesn’t require principal approval, but static pages, e. g. profiles, does), supervision of social media sites, and Third-party posts (these don’t represent the firm unless the firm specifically endorses them).
Per the same source, the SEC provides guidance in the areas of usage guidelines and content standards, monitoring and frequency of monitoring, content approval, criteria for approving participation, training and certification, and personal vs. professional sites.
For both regulatory agencies, the general ideas are good social media practices that even loosely regulated companies and industries would do well to follow, e. g. to establish a clear and consistent, easy to understand policy; maintain good records; monitor, listen to, and respond to site, group, and page visitors; know when to take conversations offline; and be sure to educate employees.
Consolidated will do well to establish a clear and consistent social media policy, and make it easy for people to find. This means posting it prominently on their Facebook page, and adding the verbiage to their Twitter background, adding it as a blog page, and placing it anywhere else where the public can locate it without having to hunt. Fidelity Investments does a great job with this on their Facebook page. Their policy is denoted in a tab which is unmistakably titled and isn’t buried past a number of other tabs or apps. The language is easy to understand, too. Just like Fidelity does, Consolidated should assure that their contact information is a part of their policy, so that investors and potential investors can find where to go if they’ve got more private questions, such as about the status of an account.
As with many companies in the social media space, the policy for Consolidated should include the specifics about the types of posts that are and aren’t allowed, so that users know what to expect and understand when they’ve crossed a line. This makes for a better overall experience for everyone on the page, plus it saves Consolidated time – no one can honestly say that they didn’t know what to expect, assuming Consolidated makes their policy as transparent as Fidelity’s is.
Consolidated will need to be careful, and to watch what they post about, in order to comply with FINRA and SEC regulations. They might also be subject to the FSA and other international regulatory agencies, and should err on the side of caution in their dealings with the public via social media. This doesn’t mean that they can’t have a presence, but they will need to exercise a higher degree of care. If a company like Consolidated does so, then its foray into social media can be productive, and can provide a greater level of service to its investors and possible future investors. And it can do it all without incurring fines from the Securities and Exchange Commission, FINRA, or any other regulatory agencies.