There are a variety of different solutions on the market that seemingly fit the social media “compliance” bill. We often get asked: Which approach to compliance is most appropriate for a company? How a company knows what they really need to ensure their social media efforts are compliant? There are two options when it comes to social media compliance, which we refer to as basic and active compliance.
Basic Compliance
We define basic compliance as archiving all social media communications. This is the absolute bare minimum that companies need in order to be “compliant” within the Financial Services industry, however there are multiple issues that can arise with a pure archiving solution. While archiving keeps a record of every communication, it does not take action on any post or have a way to identify any risk factors that are present within a social media post. In accordance with SEC Rule 17 a-4(b), it is undoubtedly important for a company to retain all records, however this alone is not enough for a company to really understand what is being said on their social media networks and to be 100% protected from compliance risks.
Active Compliance
The three keys to social media compliance for all Financial Services companies are suitability, supervision, and recordkeeping. Basic compliance only covers the recordkeeping aspect of these requirements, leaving suitability and supervision unaddressed. Active compliance effectively meets all three keys to compliance as it pertains to social media channels, accounts, and internal collaboration tools.
Active compliance combines the basic solution of archiving with policy management capabilities. Policies are a set of rules that are established by a company to identify, remediate, and archive any potential risk for their company. Policies are designed to protect a company from industry-specific risk factors such as anti-kickback, recommendations, promotions, and disclosures in addition to inappropriate language, malware, personal information, and customer complaints. An active compliance solution can identify in real-time if any of these risk factors, immediately notify the system administer of these violations, and if desired the post can be removed from the social media network.
Which Approach is Best?
We always recommend to our customers that they use active compliance in order to avoid regulatory fines and sanctions and ensure they are 100% complaint with the guidelines set forth by regulatory bodies such as FINRA, SEC, FFIEC, and IIROC. If a company is early on in their social media strategy and only feels they need an archiving solution, it is important to ensure that the archiving platform comes with the ability to later expand into active compliance capabilities.
As social media grows within a company, there is no doubt the need for active compliance will arise and it’s important to have a solution in place that can provide a company with archiving in addition to active compliance, even if those two features are not made active at the same time.
For more information on archiving and policy management, please visit www.socialsafeguard.com.