The options for financial services (FS) companies to connect directly to potential consumers via social media continually grow, but so do the risks.
Many of the platforms are familiar, including Facebook, LinkedIn, Pinterest, Twitter and YouTube. But new outlets are appearing and reaching mass popularity more quickly than ever, like BeReal, TikTok and WhatsApp, all providing instant contact with mass audiences.
But with all the benefits this increased access brings, it must not be forgotten that all communications regarding financial services products must conform to FCA regulations.
How to stay compliant in FS social promotions
1. Ensure promotions are clear, fair & not misleading
Given the character limitations of certain platforms, you need to consider whether social media is an appropriate medium for communicating your message.
2. Use software to target selected groups
Promotions can be shared or retweeted quickly on social media and easily end up in front of a non-intended recipient. By using software to help you target specific audiences, you can mitigate this risk.
3. Include both risks & benefits in your FS social message
Give sufficient information to enable customers to appreciate the benefits and also be aware of relevant risks. Describing complex financial products may be difficult when space is limited, so always consider linking to more detailed information.
4. Ensure risks are displayed prominently with equal billing
Check each financial promotion (including tweets, photos, banners, Facebook pages and inserts) to ensure risks are displayed prominently, in the same font size as the promotional message.
5. Add visual content to help convey more information
When working with restricted formats, images or videos may enable you to convey more information. But remember that this functionality can be turned off, so you must avoid placing risk warnings or other regulatory information in these formats.
6. Remember that social media is unsolicited communication
Most campaigns on social media are unsolicited real-time financial promotions. As such, the rules on 'cold calling' apply. Being one of your firm's 'followers' on social media or 'liking' your firm's page on Facebook does not constitute 'an established existing client relationship' or an 'expressed request'.
7. Get financial promotions signed off before launch
Ensure that there is oversight from someone with appropriate competence and seniority. This could be a senior manager or compliance professional.
8. Consider brand or image advertising alternatives
By just engaging in branding campaigns (i.e. company name, logo, image, contact point), you avoid all of the headaches listed above. This will still need to comply with the rules for different sectors, too - e.g. investments, mortgages, insurance and banking, credit products, etc.
Looking for more compliance insights?
If you'd like to stay up to date with best practices, industry insights and key trends across regulatory compliance, digital learning, EdTech, and RegTech news, subscribe to Skillcast Compliance Bulletin.
To help you navigate the compliance landscape, we have collated searchable glossaries of key terms and definitions across complex topics, including GDPR, Equality, Financial Crime and SMCR. We also track the biggest compliance fines, explaining what drives them and how to avoid them.
You can follow our ongoing YouGov research into compliance issues, attitudes and risk perceptions in the UK workplace through our Compliance Insights blogs.
Last but not least, we have 100+ free compliance training aids, including assessments, best practice guides, checklists, desk aids, eBooks, games, handouts, posters, training presentations and even e-learning modules!
If you've any questions or concerns about compliance or e-learning, please get in touch.
We are happy to help!
