Social media gains in regulated industries

Healthcare, financial services firms and others are getting social-media advantages, even while awash in rules. Here's how they do it.

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Social networking is serious business within regulated industries. Posts pertaining to finance, insurance and healthcare, in particular, require adherence to strict government and industry regulations. Even with the rule-a-palooza, however, some companies within these industries have not only found ways to keep regulators happy, but they've also made social networking a productive and key part of doing business.

That said, the phenomenon is still in fairly early stages. Only around 10% of regulated industries have a "truly social" enterprise where multiple social media tools have been integrated into general content consumption, according to Toby Ward, founder of Toronto-based Prescient Digital Media, a consulting firm for Fortune 500 companies.

"It depends on the organization and their level of savviness," says Ward. Companies where executives start their own blogs, for example, are more likely to end up using social media most effectively and predominantly, according to a recent study his firm conducted. "Almost all major banks have been in social media for at least a few years," Ward says.

Show me the regulations

This is despite the fact that compliance and regulatory requirements may be strictest within the finance and banking world. In just one example, in January 2010 the Financial Industry Regulatory Authority (FINRA) published specific guidelines (PDF) for blogs and social networking sites, including recordkeeping responsibilities and supervision requirements.

That hasn't stopped MassMutual, the Springfield, Mass.-based financial services firm, from engaging with social media. "We developed our social media strategy by forging a partnership with key contacts in our company's legal and compliance departments," says Marie Politis, vice president of online experience for the company. "Compliance and regulatory requirements are even more stringent when it comes to communications by the individual members on our sales force," she adds.

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