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Highly regulated companies tiptoe into social media

By Linda Melone
February 11, 2013 06:00 AM ET

"We don't use the same scripted response every time, which you may find with other banks that use a standard answer approved by Legal," she says. "Our reps can use their real 'voices' and personalize a response."

In addition, Citi reps have been trained to move customers off of public feeds and into a private chat environment, where issues can be resolved confidentially and securely.

Social media can also be used for more traditional marketing efforts, such as making sure people are getting the information they need and that the information is accurate, says Peluso.

Rebuilding Trust in Banks

"One current challenge we face is that many people have a deep-seated anger with the banking industry," says Renee Brown, social media director at San Francisco-based Wells Fargo. "Consumers are not trusting us right now." That makes it especially important to engage customers constructively via social media, since many people hit social sites when they have complaints.

But the need to, for example, retain client records for seven years and make sure company reps comply with the rules and regulations can delay efforts to get involved with social media. Wells Fargo partners with consultancies that help make sure the bank meets regulatory requirements and is still "able to interact with customers, clients and potential clients," says Brown.

Wells Fargo's vendors include Hearsay, Socialware and Actiance. "These companies offer software to help with pre- and post-review options to ensure content is appropriately vetted, helping to streamline our internal processes," says Brown.

The two most regulated areas involve broker-dealers. They include investment banking and Wells Fargo's brokerage unit, as well as its home mortgage consultant network, says Brown.

One of the first steps in resolving customer issues is to separate actionable complaints from people who simply want to vent, says Brown. From there, helping customers resolve problems must exclude, by law, giving financial advice via social networks.

"While you may post a note to a friend about an investment, when you are licensed, you can't use certain terms such as mutual fund without it triggering the need for a disclosure," says Brown. "We make sure we go through the right compliance reviews before it's posted so nothing gets out there that shouldn't be posted."

This involves the bank's vendors "along with our legal and compliance partners to ensure we have the right oversight in place, but also the ability to be timely in posting and responding on social media channels," Brown says.

Best Practices

Tips for Going Social in a Regulated Industry

1. Work with the legal department, human resources and other groups to understand regulatory and legal requirements and create policies and procedures that work for all constituencies: regulators, employees and customers.

2. When in doubt about whether you're in compliance, take a public conversation into a more private venue, like email or the telephone.

3. Educate anyone in your company who's involved in social media about your policies. Explain why those policies exist, and discuss the best ways to use social media while remaining in compliance with regulations.

4. Like a company in a less regulated industry, develop a social media voice that's true to your brand, respond quickly to negative comments, and provide lots of relevant and updated content -- so people have a reason to come back.

5. Always disclose your connection to your company (including your title and the department you work in) when you comment or ask a question on social media.

— Linda Melone



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