Archive social media postsFor most businesses, social media archiving doesn’t need to be a consideration. As we detailed last month, however, financial services firms cannot afford to be as carefree.

The Financial Conduct Authority (FCA) requires them to be able to draw up information on request and that extends to electronic communications, including social media.

That might be enough reason for some to decide against using social media altogether – however you do so at your own loss, as digital media hands you the potential to build a presence in the marketplace.

If you’ve got any ideas for expanding your audience significantly that don’t involve digital communication, we’d love to hear them…

Most financial services firms have realised that they must embrace social media if they want to stand out from the crowd, even if it does come at the cost of time and money.

However, not all of them are remembering to monitor and record their social media activity, according to a recent study.

Firms’ “tick-box approach” to compliance

As Professional Adviser reports, compliance firm Smarsh UK put a questionnaire to 100 people working in financial service compliance only to find that a significant proportion are not taking social media seriously.

Regardless of the platform, the survey found that half of the businesses quizzed do not have sufficient archiving and supervision systems set up to ensure compliance relating to the “retention and oversight of electronic communications”.

The oversight could see them in hot water if they were asked by the FCA to submit a specific piece of online communication. Smarsh suggests it’s the result of a “tick-box approach” to compliance, with its UK regional director James Thompson urging firms to put the lapse right.

“Without adequate archiving and supervision strategies in place, firms expose themselves to tremendous risk,” he said.

“Our research shows an alarming disjoint between firms understanding their (electronic communication) compliance requirements and implementing the systems to enforce and support these.”

Thompson warns that the cost of non-compliance doesn’t merely comprise a regulatory fine, but could cause reputational damage, hindering the ability to get new business whilst chipping away at customers’ and investors’ trust.

Given the lack of social media archiving, it’s perhaps little surprise to learn that businesses are not all that confident in being able to produce requested information at the drop of a hat.

When asked why confidence was lacking, reasons given included insufficient staff resources (55%) and having little knowledge about archiving and supervision technology (48%).

Do you agree with Smarsh that social media archiving is essential for financial services firms? Or can the use of such tools be avoided?

Ben Hollom

August 7, 2015