Bank Security Officer Wanted - Social Media Skills a Plus

The Security Officer for BBVA Compass Bank likely received a crash course in social media tonight after someone attempted to rob BBVA's Vestavia Liberty Parkway Branch.

Police in Vestavia Hills are looking for a man who they say tried to rob BBVA Compass Bank. Bank surveillance camera photos of the suspect from the attempted robbery have been posted to the Vestavia Hills Police Department Facebook page.

Increasingly police departments are turning to social media sites to share information and alert the public about wanted individuals. Facebook has increasingly become a valuable crime fighting tool for banks and police investigators.





If you're a Bank Security Officer you may want to do a few things to improve your chances of catching perps:

1) Implement procedures that allow immediate transfer of video and photos to Internet-friendly formats. The faster the images are available, the better the chances of catching criminals.

2) Determine immediately upon an incident whether the local police department has a Facebook or other social media site established for the purpose of distributing images and video to the public.

3) Do not post any photos or video of the crime on the bank's Facebook page without first consulting with the local police department. They may have a strategy that may conflict with your strategy. So if the bank wishes to post photos or video, first run it past the police department. In addition, posting such information may create reputational harm by giving the impression to customers that visit the bank's Facebook page that the bank's branches are not safe. So having the information posted on the police department site may be the best  bet.

Using Location-Based Social Media Without Driving Up Branch Costs

On August 30, 2011, The Financial Brand posted a great article on the use of location-based social media platforms such as Foursquare. According to the article, "most retail financial institutions have spent the better part of the last decade shooing people out of costly branch networks, choosing to push online, mobile and paperless solutions over one-to-one, personal interactions. Most banks and credit unions have done what they can to keep consumers out of branches and reduce transaction volumes."

It's true.  Since online banking and ATM availability have become ubiquitous banks have looked to leverage these lower cost options in lieu of the higher costs associated with branch operations.  So why are banks now trying to drive the traffic back into the branches through "check-in" campaigns associated with location-based social media platforms?  Confusion.

In an attempt to make use of these very fun and interesting tools, marketers are unintentionally undermining years of effort in moving customers to lower cost distribution channels.  While there is some advantage to drive traffic to branches - to open accounts.  In most cases the transactions can be managed through online banking or automated phone banking.

If bank marketers insist on using location-based social media tools - and I believe they should, they need to get just a bit more creative.  For example, banks can identify their best business customers and reward consumers for checking in at bank business customer locations.  Or even better, how about struggling bank borrowers.  Send business to them so they can make they loan payments this month!

Banks are extremely supportive of community-based events and sponsor many such events.  How about rewarding customers for checking in at the local YMCA fundraiser or farmers market or similar community event.

Location-based social media platforms are great.  But marketers need to think a little bit before unleashing their power.  With a little thought banks can make use of a great tool while creating significant benefit for the bank and the community - without having to hire more tellers.

No Good Deed Goes Unpunished

A recent B & T article featured Australia's Commonwealth Bank.  The feature of the story was Andrew Lark, Commonwealth Bank's newly installed Chief Marketing Officer.  Mr. Lark highlighted Commonwealth Bank’s recent tie-up with Facebook Deals, offering people who opened a transaction account at the bank and liked the company on Facebook and checked in at a branch using Facebook Places, two free movie tickets every month for a year.  The strategy was successful from the point of view of new customer acquisition.  According to Commonwealth Bank's Facebook page it opened 2,200 new accounts.

While the campaign itself met its objective of establishing new accounts and growing its Facebook subscriber base, the campaign also went a long way upsetting existing customers who did not feel the love as they were not eligible for the free tickets.  Obviously, the point of the campaign was new accounts.  However, as detractors filed comment after comment on the Bank's Facebook page dedicated to the offer, Commonwealth Bank was no where to be found, resulting in greater and greater criticism.

Where Commonwealth Bank failed was in addressing the comments head on and explaining its strategy.  With social media you live by the sword and die by the sword.  In this case, the sword is transparency.  Commonwealth Bank's lack of transparency and participation let a great opportunity escape to "be real."  Instead of hiding from the comments the bank should have come out and explained the strategy so that its longstanding customers understood.  Along the way the bank would have picked up some helpful information to use relative to customer service and marketing.

Social Media + Mobile = Business Continuity/Disaster Recovery

An area of banking that is the equivalent of going to the dentist is the business continuity planning/disaster recovery ("BCP/DR") preparation and testing.  While there is nothing more true than the old saying regarding an ounce of prevention, there is nothing more frustrating and tedious than thinking and planning for the unthinkable.  Regardless, as bankers we must make sure we do not fail to plan so as to not plan to fail.  Lives may depend on it.

A recent American Banker article discussed how banks recently affected by hurricane Irene used social media and mobile to efficiently address BCP/DR challenges.  During the recent storm, banks such as Citibank and TD Bank used social media and mobile to inform customers of branch closures and ATM availability.  This enabled customers to limit their exposure to the hurricane and obtain the needed services to manage through the storm.

Whether the event is a storm, civil disobedience, earthquake or other natural or man-made disaster, the more information a consumer has the safer the consumer will be.  Social media and mobile can be used to provide customers with "hot spots" such as floods, riots, fires, etc, near branches and ATMs and suggest safer alternatives.  The same social media and mobile combination can be used to obtain information from customers regarding dangers.

While social media will not do much to prevent or resume banking operations, it is a nice option to have for customers during difficult times.  Every bank should consider using its social media accounts to keep customers informed throughout a disaster.

Wells Fargo Provides College Students with Motherly (Fatherly) Advice

Wells Fargo is attempting to be less "corporate" and more "human" in a recent campaign to reach out to college-aged students.  The bank has offered up 10 tips for college students to protect themselves. 

According to Cristie Drumm, spokeswoman for Wells Fargo in Denver,“people ages 18 to 24 take nearly twice as long to detect fraud before other age groups.  We want to help our customers protect themselves from identity theft. It’s a constant and growing problem.”

For example, young people also tend to “overshare” on social media, so it wouldn’t hurt to remind them that fraudsters often get access to private information via Facebook.  Wells' advice to students: don’t over share. Social media is increasingly popular, but it’s a good idea to keep personal information private. Fraudsters can use personal information such as birth date, mother’s maiden name and pet’s name, to help gain access to an account. Also, it’s a good idea to keep other information private such as mobile and home phone numbers; email address; and dorm, apartment and home addresses.

This is a great example of a bank sharing important lessons of social media use.  Other tips should be Post It Once, View It Forever.  Youth need to know that the Internet is forever and that any photos, comments, videos and other information posted today can lead to serious ramifications in the future.

See the complete list of advice here.

10 Legal Issues Every Bank Should Consider

The attorneys at Frost Brown Todd  have provided the following "10 Legal Issues Every Bank Should Consider" before jumping head first into social media.  FBT advise banks to adopt a social media policy that both achieves its goals and protects it from legal risks. In addition to the legal issues that every business faces when engaging in social media, a financial institution faces very specific set of regulations that require careful consideration. When creating a social media policy for a financial institution, the following ten issues, laws and regulations should be considered.

1. Privacy: One of the greatest risks associated with a financial institution’s use of social media is the protection of private information. Among other things, the Gramm Leach Bliley Act (GLBA) requires financial institutions to protect the personal information of its customers. When posting or communicating over social media, financial institutions and their employees must remember that the information being published can be accessed by the public at large and personal information cannot be disclosed. Also, if the financial institution is collecting information over social media, certain privacy disclosures must be made, including an opportunity to opt out of any disclosure of a customer’s information to third parties. Finally, the GLBA includes protections against “pretexting” or the practice of obtaining private information under false pretenses.



2. Informal Posts May Be “Advertising”: The FDIC broadly defines the term advertisement as “a commercial message, in any medium, that is designed to attract public attention or patronage to a product of business.” Regulation Z, discussed below, defines an advertisement as “a commercial message in any medium that promotes, directly or indirectly, a credit transaction.” 226.2(a)(2). Regulation DD defines advertisement to include any “commercial message, appearing in any medium, that promotes directly or indirectly the availability or terms of. . . a new or existing account.” In each case, the definition is broad and could include informal communications in the form of tweets, blogs and comments.



3. Required Advertising Statements: If a financial institution is engaging in advertising over social media, there are a variety of technical requirements that must be followed. For example, the FDIC requires an official advertising statement and/or the FDIC logo be used. 12 CFR § 328.3. Another example requires banks advertising loans for dwellings to include the “equal housing lender logotype” and/or indicate that the bank makes such loans without regard to race, color, religion, national origin, sex, handicap, or familial status. 12 CFR § 328.3. Similarly, the National Credit Union Administration (NCUA) requires an official advertising statement from its members on their website and in advertising. 12 CFR § 740.5.



4. False and Deceptive Advertising: The new Bureau of Consumer Financial Protection is now charged with the power to prohibit “unfair, deceptive or abusive acts or practices” with respect to consumer financial products and services. Financial institutions engaging in social media should be careful not to run afoul of deceptive advertising laws. The prohibition against deceptive advertising by financial institutions is nothing new. Section 5 of the FTC Act (15 U.S.C. § 45) prohibits “unfair or deceptive acts or practices” in commerce. The FTC Act excludes banks from FTC enforcement authority. However, for some time, banking regulators have interpreted the enforcement ban against the FTC to mean that banking regulators themselves should enforce Section 5 under Section 8 of the Federal Deposit Insurance (FDI) Act (12 U.S.C. § 1818), which permits “the appropriate Federal banking agency” to bring enforcement actions against banks that are “violating or [have] violated, or … [are] about to violate, a law, rule or regulation.”



5. Endorsements: The FTC has released guidelines concerning the use of endorsements and testimonials in advertising. These guidelines were developed to help advertisers comply with the FTC Act. The guidelines require disclosures regarding any material connection to the endorser, including celebrities, bloggers, experts and consumers. In addition, advertisements must only reveal typical results and cannot hide behind a safe harbor disclosure that “results are not typical.” There are many social media forums available where persons can post comment about a financial institution or its products. Financial institutions should make clear to employees that if they make any comments about the financial institution, its products, or services in social media, they must disclose their relationship with the company.



6. Securities Laws: Employees may jeopardize private securities offerings by engaging in conduct only permitted by licensed brokers, releasing information too soon (“gun-jumping”), making untrue statements of material fact, performing insider trading, or other misuses of confidential information that violate securities laws. See also Securities Exchange Commission Guidance on the Use of Company Web Sites, 17 CFR Parts 241 and 247 [Release Nos. 34-58288, IC-28351; File No. S7-23-08], effective date August 7, 2008.



7. Advertising Consumer Credit: The Truth in Lending Act (Regulation Z) assures the meaningful disclosure of consumer credit and lease terms, including those in advertisements, so that consumers can easily compare terms and shop wisely for credit. If you or your employees are engaging in communications regarding credit or lease terms over social media, then the requirements of Regulation Z apply. Also, a record of any communication of this kind must be retained for 2 years.



8. Advertising Deposit Accounts: The Truth in Savings Act (Regulation DD) contains certain requirements for any commercial message in any medium that promotes, directly or indirectly, deposit accounts. If a communication of this type is sent over social media or otherwise, it may not be misleading or inaccurate. Regulation DD also prohibits any description of an account as “free” or “no cost” (or contain a similar term) if any maintenance or activity fee may be imposed on the account. If the advertisement states a rate of return, it must be expressed as an annual percentage yield and certain other disclosures must be made. There are some exemptions for advertisements that are made electronically, but some disclosures are still required. Finally, if a communication of this type is sent, a record of the message must be retained for 2 years.



9. Loan Application Communications: The Equal Credit Opportunity Act (Regulation B) provides certain requirements for any organization that regularly extends credit, including banks, small loan and finance companies, retail and department stores, credit card companies, and credit unions. Everyone who participates in the decision to grant credit or in setting the terms of that credit, including real estate brokers who arrange financing, must comply with the ECOA. Among other things, the Act prohibits lenders from discouraging borrowers from applying or rejecting an application because of race, color, religion, national origin, sex, marital status, age, or because an applicant receives public assistance. This Act requires all records related to a loan application be maintained for 25 months (ie: complaints or comments regarding the loan must be retained). Thus, any communications made over social media related to a loan application must be preserved in some way.



10. Communications Regarding Community Reinvestment: The Community Reinvestment Act (Regulation BB) is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods. However, there are some provisions that require communications, whether over social media or otherwise, be preserved. Specifically, Regulation BB provides that a bank shall maintain a public file that includes “all written comments received from the public for the current year and each of the prior two calendar years that specifically relate to the bank's performance in helping to meet community credit needs, and any response to the comments by the bank, . . . .” If a community bank or its employees are engaging conversations over social media regarding community credit needs, efforts should be undertaken to preserve those comments and responses.

In addition to these 10 tips, be sure to read:

1) Bank Lawyer's Social Media Checklist
2) Social Media and Bank Compliance Requirements

3) Social Media Policies Are Not An Option

4) Creating an Ironclad Social Media Policy

Investment Advisors Joining the Conversation

The Street reported that Morgan Stanley was rolling out a program for 600 of its advisers to use several social media sites, with the "most productive financial advisers" being the first to gain access, first by setting up LinkedIn profiles, and then sending out messages through that site through other social media outlets, including Twitter.

Now that FINRA has issued Regulatory Notice 10-06 (January 2010), providing guidance on the application of FINRA rules governing communications with the public to social media sites and reminding firms of the recordkeeping, suitability, supervision and content requirements for such communications, expect more firms to pick up the pace.  


http://www.finra.org/