Embracing Social Media or Not...Facebook For MLOs
It seems signs of social media are everywhere you look these days. You see the recognizable “F” icon for Facebook, the happy little Twitter bird, the blue and white square of LinkedIn, the colorful lens of Instagram and myriad other sites dedicated to sharing…because that is really what they are: networks through which we share pretty much everything. While it is certainly entertaining to observe the changes in your childhood friends, to reconnect with those in your past or those you just met, there are risks associated with the information we share – not to mention seemingly instantaneous marketing based on your recent internet searches popping up in your feed.
Usage of social media has become mainstream and commonplace – a way to connect with your customers and build your brand. Financial institutions are no exception. Many financial institutions have taken great pains to establish social media platforms from which to conduct business, build brand awareness and foster a connection with their customers. It’s the way of world, but you need to ensure you have a proper infrastructure in place to manage your social media presence before signing up and posting away. Without that foundation, you could open your institution up to reputation risk or the potential for consumer harm á la UDAAP and fair lending territory.
Whether you are just wading into the social media fray or have been using it consistently for quite some time, it is critical to consider your strategic focus.
§ What are your ultimate objectives in using social media?
§ Are you focusing more on community involvement and getting brand awareness and goodwill for the bank or is it going to be a channel for advertising and promotions?
§ Are you trying to expand your market footprint beyond where it is today?
§ What channels will you use?
§ Can you quantify your objectives (e.g. loan growth, deposit growth, customers holding multiple accounts, etc.)?
§ How will you monitor and measure results and effectiveness?
§ What expectations will you put in place to ensure the investment and the use of social media doesn’t idle down the road?
§ With what frequency do you anticipate posting and what types of posts will you make?
§ Have you identified one or more individuals with ownership over this process?
§ Will you be using a third party to offer, administer or add to your content?
When you start considering these questions, the process can appear to be a little more daunting than at first blush. However, if you systematically and methodically approach the process, the implementation and ongoing administration can run rather smoothly. Now, any time we are talking about an additional or different delivery channel, you can bet our friend the risk assessment is going to rear its ugly head. You should absolutely conduct a formal risk assessment prior to establishing your social media presence, considering compliance, legal, reputation and operational risks, at a minimum.
Building upon your risk assessment – the foundation of your program – you will need policies and procedures to administer this function. Remember, your policy should establish expectations for proper conduct. Your policy should address social media usage inside and outside the bank, on a personal level and on behalf of the bank. Even if your institution does not use social media in any way, there is a very good chance your employees do. Do you know whether they are using it at work? Do you allow them access to social media sites through your network? Are they permitted to disclose that they work for your institution on their social media profiles? If you permit employees to post on behalf of the bank – as an MLO attempting to drum up business, for example – are you monitoring their posts to watch for any potential indication of compliance issues, legal or reputational risk? Your program needs to address these things and more:
§ Primary and Secondary Administration: Your institution’s social media presence should be administered through a centralized function. You should identify one or more individuals to work together in developing posts, monitoring your sites, and performing other administrative tasks to maintain compliance with your program and its intended objectives. Centralization of this function is key to ensuring consistency and control over your brand.
Oversight and Monitoring: Active and ongoing monitoring of your social media sites is critical. You want to make sure that you are staying aware of any potentially negative issues or non-compliant posts that could land one of your employees or your bank in hot water. Some institutions utilize third parties to perform this monitoring function as they use sophisticated technology to monitor your presence on the web through many different mediums. Remember that with any use of a third party, you’ll need to employ initial and ongoing vendor due diligence.
§ Employee Training: Bank-wide training on social media use, both on behalf of the bank, and on a personal level (as your staff is essentially an extension of your brand) must be addressed. While we all have a right to put ourselves out there, we must remain cognizant that, in the simplest of terms, we are who we “hang out” with. We could, by association but perhaps not by intent, tarnish the reputation of our institution or our coworker by what we say or post. Appropriate conduct should be expressly addressed within employee training sessions and memorialized within policy.
§ Audit and Compliance Functions: You should have an independent party – whether it is an individual or department within the bank that is independent from the social media function or an external party – periodically review your social media presence and evaluate the effectiveness of controls you’ve implemented to monitor and manage associated risks. Additionally, if you plan to use social media to advertise or market your products or launch promotions, you need to be cognizant of advertising requirements under Regulations DD and Z, and ensure all posts comply with those requirements.
§ Board Reporting: Your Board should be periodically apprised of the bank’s social media performance. The Board should know the platforms used by the bank and how or whether they are working to create brand awareness, maintain or grow your reputation and the impact to the bank’s bottom line. In other words, does it pay to utilize these platforms with the risks and, by default, the controls needed to manage those risks?
§ Updates to Supporting Policies: Your social media use may bleed over into other areas of the bank and your policies should be updated accordingly. A few that come to mind include, but are not limited to: Your BSA|AML Program, IT and Information Security, Consumer Complaints, UDAAP and Vendor Management.
So, to embrace social media or not? That is the question. It’s where we’re headed and remember, old ways won’t open new doors.
Facebook Guide For MLOs
- Many MLOs want to maximize their online presence and opportunities to generate new business through their social media interaction. Whether it is through Facebook, LinkedIn, Twitter or other social media site, there are a few things to keep in mind:
- Establish policies and procedures for maintaining such pages
- Require MLOs to disclose their social media pages to you and provide access to view their posts
- Consider requiring MLOs to set pages for self-posting only, versus allowing others to post or comment
- Conduct detailed training on the dos and don’ts of posting as an MLO of your institution, your expectations for their social media behaviors and consequences of violating your policy
- Establish and communicate RESPA Section 8 issues regarding posting or mentioning real estate agents, companies, or specific properties
- Periodically review MLO posts to ensure compliance with bank policy