Social customer service, like every other aspect of external business communications, is impacted by current legislation. A prime example of this is in the finance industry, where it is business critical to understand the laws that govern customer service engagement on social before implementing a social care strategy.
It is essential that financial institutions recognize, understand and work within these constraints to deliver an integrated social customer service strategy. Any business seeking to gain a happy consumer base needs to be aware of exactly what is, and what is not, permitted by the current legislation.
If you’re in finance, chances are you’ve heard about “Social Media: Consumer Compliance Risk Management Guidance”, published on December 11th by the Federal Financial Institutions Examination Council (FFIEC).
The FFIEC is intended to help financial institutions understand and successfully manage the potential risks regarding the use of social media. It clarifies that existing consumer protection and compliance laws and regulations apply to activities conducted by financial institutions through social media as they would to activities conducted through other channels. Also importantly, it reminds institutions that they must properly address risks, including compliance, operational, third-party, and reputation risks, that arise in connection with social media activities.
We’ve highlight four areas from the guidance document that are important to consider when assessing the reputational risk associated to your brand:
-Third Party Concerns: Working with a third party to outsource social media engagement can cause significant risk. Risk management is entirely up to the financial institution, even if they rely on a third party to manage their social media. Therefore, to tackle this, financial institutions should ensure proper audit trails are in place to establish a clear road map for responsibility.
-Privacy Concerns: Even when a financial institution complies with applicable privacy laws in its social media activities, it should consider the potential reaction by the public to any use of consumer information via social media. The financial institution should have procedures to address risks from occurrences such as members of the public posting confidential or sensitive information – for example account numbers – on the financial institution’s social media page or site.
-Consumer Complaints and Inquiries: Reputation risk exist when the financial institution does not address consumer questions or complaints in a timely or appropriate manner. The institution should also consider the risks, particularly the reputation risk, inherent in not responding to complaints and disputes received through other channels and tailor its policies and procedures accordingly.
-Employee Use of Social Media: Establishing policies and training to address employee participation in social media representing the financial institution. For example, if an employee is communicating with a customer regarding a loan product through an approved social media channel, policies should include steps to ensure the customer is receiving all of the required disclosures.
Director of Social Strategy at Conversocial, Andrey Grigoryev, stated “These potential risks should not be seen as a barrier to adopting a successful social customer service strategy, but rather as areas that should be thought through properly when developing a system of scalable social customer care for financial services organizations.”
“Social customer service comes into its own when meaningful, two-way dialogue takes place between brands and their consumers, a phenomenon that is true for highly regulated and non-regulated industries alike. Financial services organizations must take additional safeguards to protect sensitive information - for example implementing approval workflows that would allow for senior management to moderate social messaging before it goes ‘live’.”
How an organization responds to complaints or issues will be the measure of how the public perceives them. Many financial organizations today have overcome the hurdles of their regulatory environment to ensure they are delivering the best possible customer experience through social media. With even the official guidance recommending that you are responding properly to customer complaints and questions over social media, the time is now to ensure that your organization is meeting the needs of your customers.
Learn everything you need to know to deliver first class social customer service, even in a regulated industry by downloading our copy of ‘The Definitive Guide to Social Customer Service’ below.