Banks slow to connect online due to compliance concerns

A company joining Twitter might usually go unnoticed, but the financial services industry has been slow to jump onto social media platforms.

Goldman Sachs made headlines in May when it launched its first Twitter account.

"We are now live on Twitter (finally) at the GS Annual Meeting," the investment bank's inaugural tweet read. "Follow us here for updates on our work, our research, and our people."

A company joining Twitter might usually go unnoticed, but the financial services industry has been slow to jump onto social media platforms. Goldman Sachs and others are now becoming more transparent and looking to connect directly with stakeholders, though compliance concerns remain.

Prior to setting up a Twitter account, Goldman Sachs restricted social media use to recruiting first-year associates through LinkedIn and YouTube, says global head of corporate communications Jake Siewert. Twitter allows Goldman Sachs to reach a broader audience and communicate about a wider range of topics such as research and community work, he says.

"As regards what we could be doing, the next logical step for us to communicate was Twitter," Siewert says. "You can't not be in that conversation."

At press time, Goldman Sachs had about 16,000 Twitter followers, but wasn't following any accounts. The company also has a "reasonably dormant" Facebook page, Siewert says, and it is considering other platforms.

"It's in the early stages," Siewert says of the company's social media strategy. "We're still making it up as we go along."

Media monitoring
Financial services companies have been slow to use social media because of tight compliance regulations, say Siewert and other executives.

The Financial Industry Regulatory Authority (FINRA) issued social networking guidance in 2010 that requires firms to monitor and archive all communications related to broker-dealer business on social media sites, just as they must do in other forms of communications. "The first group we often meet with is the compliance department," says Josh Passman, SVP at Prosek Partners (formerly CJP Communications), which specializes in financial communications. "FINRA doesn't have many black-and-white rules about social media, so there's not a crystal clear roadmap to follow."

Morgan Stanley announced in June that it would give about 17,000 of its financial advisers access to Twitter and LinkedIn, up from 600 employees who were part of the company's year long social media experiment. Still, the policy received criticism because advisers must choose messages from a pre-written library of tweets and submit LinkedIn postings for approval.

"Pre-written content is a time saver and a great way to get introduced to the platforms," says David Rosen, director in the corporate-financial communications practice at Burson-Marsteller. "If it's framed authentically, then it adds value to the community."

Human faces
Asset management company OppenheimerFunds, which launched its first Twitter account in 2010, has ramped up its efforts on Twitter, Facebook, LinkedIn, and YouTube to reach investors and financial advisers, says assistant VP of marketing Jacob Rothschild. The company's tweets and YouTube videos offer insight into its portfolio, and its Facebook page, launched at the end of 2011, shows "the faces behind the funds," Rothschild explains.

Wells Fargo appointed Renee Brown director of social media, a new role, in June. Oscar Suris, EVP of corporate communications at Wells Fargo, opened a Twitter account in April, and other executives have joined as well. Besides Twitter and Facebook, Wells Fargo also has a blog site. The channels cover topics such as social responsibility and community relations, Suris says.

As Suris and other financial communications leaders have found, social media allows companies to help shape the conversation at a time when the finance industry's reputation is struggling, but many still lag behind in their social media use.

At press time, Morgan Stanley's Twitter account had about 3,000 followers and 85 tweets. JPMorgan Chase has a Twitter handle for its consumer bank, @ChaseNews, with about 2,500 followers, as well as the account @chasesupport for customer service.

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