Financial Services Roundtable Releases "Social Media Risks and Mitigation"

EXECUTIVE SUMMARY

Social media is a term used to define the relatively recent phenomenon of mass personal publishing most often intended for public consumption and typically conducted in an interactive and conversational style. Social media‘s rapid growth – it is now the most popular online activity – has garnered the attention of the commercial space, including financial institutions hoping to meet their customers‘ evolving needs and expectations through this medium.

Social Media and Risk Mitigation - June 2011

Recognizing the rapid adoption of social media exemplified by now familiar sites Facebook, Twitter, and LinkedIn, BITS has developed this paper to provide financial services companies with insight into the various risks associated with the deployment and use of social media. This paper does not intend to cover every situation an organization might encounter, but instead serves to highlight the issues common to many financial institutions and provide guidance on how these risks might be moderated.

This paper is intended for a general audience, from business practitioners to compliance, risk and legal professionals, primarily from a United States perspective. It provides a synopsis of the major themes an FI should consider when using and deploying social media and is best used as a reference guide, delving into the situation or organizational section that is most appropriate to the reader. To assist readers in identifying which sections are most applicable to their purpose and expertise, a risk matrix is provided in Appendix E.

This paper addresses risks and mitigation methods for financial institutions using social media from three perspectives: To communicate with or service customers, By employees within a financial institution in personal and professional capacities, and By employees or contractors outside the office.