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.

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.

MassMutual is working with a vendor, Actiance, to roll out a pilot program that meets FINRA's regulations to review and archive the initial, static posts. ("Static" is a term used by FINRA to reference initial posts; once the audience engages with the content, the resulting conversation is considered "interactive.")

Another MassMutual goal for its pilot program is to monitor interactive communications that require review after they're posted or exchanged.

The benefits of connecting with customers and potential customers through social media make the effort worthwhile, practitioners say. "Money is a highly sensitive topic," says Michelle Peluso, global consumer chief marketing and internet officer for New York-based Citigroup. "One of the things social media allows us to do is 'listen in' to hear what people say about our brand, our competitors, our industry, products, services and our people." Even given all those advantages, though, "We have to think hard about the regulatory challenges," she admits.

When customers have a bad experience with Citi they may complain about it on the Twitterverse or on a blog. "We don't let the fact that we're a regulated industry dehumanize us," says Peluso, whose team of dedicated social service reps jumps in and offers to help them.

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

In addition, Citi reps have been trained to move customers off the public feed and into a secure chat environment, which enables the resolution of issues in a private and secure way.

Another component of social networking encompasses more traditional marketing. That's about making sure people are getting the right information and that the content is there, says Peluso, referring to the information on the website as well as on various social networking channels.

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