The Financial Conduct Authority (FCA), who sound very serious and like you shouldn’t mess with them, has this week “finalised” its guidance for how financial services should use social media.

The FCA is basically a financial regulatory body, ensuring that firms run with consumers’ best interests at heart and provide appropriate products and services.

The fact that the FCA has felt the need to wade in with its own guidance for social media engagement, means that it clearly understands the increasingly important role of social customer service

The FCA recognises that social media are powerful channels of communication which are of significant value to firms and do not want to prevent their use. 

Here we’ll be taking a look at the FCA guidance, and looking at the challenges financial service providers face on social.

Challenges on social

It’s a difficult balance to maintain. Provide an efficient customer service channel/marketing channel in a relatively new space that fully complies to banking regulations whilst also operating in the public eye.

For a firm to operate a social channel there takes a massive amount of forethought and planning as it’s a highly regulated environment. Far more so than other B2C industries. You can’t just suddenly announce a discount incentive, or a ‘retweet to win’ competition, the industry just doesn’t allow it.

Barclaycard spent a whole year in advance planning its Twitter account with a dedicated team working on it full-time.

There’s also an issue of brand reputation. Complaint reporting for social media is the same for any other channel. If a customer complains by telephone, that complaint is recorded and published across the financial services sector. This is also true of social channels.

When it comes to customer service, banking or credit card companies cannot ask for account information on social, not even via private or direct information. So customers have to be directed to a secure email channel. This is of course not inherently social, but it does mean that a customer can safely provide information that will give an advisor access to their account. 

Ultimately these problems are manageable though, and shouldn’t be used as an excuse not to be on social, after all the argument for whether you should be on social or not has long since passed. 

Consumers expect your presence on social, they will seek you out for immediate enquiries there. Social is also the key way to get your messages and content heard and shared.

So what does the FCA suggest…

FCA guidance

The FCA’s guidance states that any form of communication (including social media) can be seen as a financial promotion if it contains an invitation to engage in financial activity. Therefore all communication must be “fair, clear and not misleading”.

There‘s a lot of worry around social communication ending up in front of an ‘unintended’ audience through sharing and retweets. “Firms should take account of that in their decision to promote through social media” the FCA goes on to advise managing this risk by using  “software that enables advertisers to target particular groups very precisely.”

I’m going to reprint the guidance on retweets in full as it’s a fascinating piece of legalese.

Where a recipient shares or forwards (such as by retweeting) a firm’s communication, responsibility lies with the communicator, so in that case the firm would not be responsible. We remind firms, however, that any breaches of our rules in the original communication are still the responsibility of the originating firm, and not the ‘retweeter’. Sharing or forwarding by a third party does not  ‘cure’ any original non-compliance.

Firms are required to include risk warnings or other statements in promotions for certain products and services. The same is true for social. However this poses particular challenges for the use of social media character-limits.

One possible solution the FCA provides to this problem is the insertion of images into tweets, which allows relatively unrestricted information to be conveyed. “The image must also be compliant” the FCA further reiterates.

Agile marketing may become difficult in the future for firms operating in the financial industry, the FCA states that firms have an obligation to have an “adequate system in place to sign off digital media communications. This sign-off should be by a person of appropriate competence and seniority within the organisation.”

The use of hashtags has also been very firmly come down upon. 

We believe that hashtags are not an appropriate way to identify promotional content. We note that paid for advertising on several social media platforms already signpost that the content is promotional (e.g. Twitter includes statements such as ‘promoted by…’ or ‘promoted only’ and on Facebook it states ‘SPONSORED’), therefore the additional use of ‘#ad’ would not be required to identify the communication as promotional.

It seems the main worry for the FCA is that users may click on a hashtag and be taken an unregulated page of tweets outside the firm’s control and may lead to “customer confusion”.

And with that, the financial industry was officially welcomed into the world of social in a very careful, paternal manner.

You can read the full document containing all of the FCA’s advice here, it is genuinely a fascinating read.

For more from the blog on how the financial industry uses social, check out: