The FCA social media regulations and how to navigate them

social media

Stephen O'Toole

Posted on September 1, 2015

Earlier this year, the Financial Conduct Authority (FCA) grabbed the bull by the horns and published guidance for financial organisations on how to use social media without getting in deep water over compliance rules.

It’s been timely and useful advice. Social media use, trends and practices have been evolving too quickly for many organisations to get a good handle on it, and in the complex world of the financial industry and its regulatory systems, this has potentially meant trouble.

That’s been a shame. Social media can be and is a powerful and positive platform for financial service organisations. Used well, it can be a great way to build brand personality, enhance your content marketing, connect with a wider audience and explore creative ways of spreading a message.

Armed with the new guidance to clarify confusing areas and with accessible tools available to support you, we want to encourage financial brands to stop seeing social media as a threat or a problem, and start making the most of its potential.

The guidance

The guidance itself focuses on clarifying what sort of social media messages fall under regulated aspects of financial trade activity and how they should be handled. It’s great advice – it sets the rules of the playground, yes, but by understanding them, we’re given the freedom to explore creative ways to comply.

Social media is defined in a digital context as ‘websites and applications that enable users to create and share content or participate in social networking’. This includes social and professional networks, blogs, forums and image and video-sharing platforms.

Brands are encouraged to especially think about the following:

  • Recognise your financial promotions

For social media to be a useful marketing tool, we need to be able to talk about our products and services, provide incentives to participate, and encourage people to take action. And there’s nothing to stop us still doing that, but the guidance reminds us that anything we share that incorporates an invitation or encouragement to participate in financial activity, or a promise, hint or claim as to its worth or outcome, is considered a promotional message by the FCA.

All promotional activity is regulated, so we need to think about the words, intent, content and clarity of all our social messages and make sure that they’re compliant to promotional restrictions.

  • Make messages fair, clear and not misleading

The restricted space and throw-away nature of some social messaging platforms make it a challenge to communicate concisely, wisely and include all necessary information. But the FCA guidance again reminds us that social media messages aren’t exempt from financial organisations’ requirement to keep all communication ‘fair, clear and not misleading’.

This includes the need to add relevant risk warnings, how clear the message would be if viewed out of context (shared on a different platform, for example), how much prominence any required warnings are given, and past-performance rules.

If the limitations of your platform make it hard to adhere to these restrictions, you need to take time to rephrase your messages, or try another way.

  • Ensure messages can stand alone

Social media can act as a useful signpost to more comprehensive information and more persuasive promotions, but the guidance also clarifies that even the signposts themselves must comply with relevant rules and should be thought about carefully. This includes individual tweets, insertions, posts, banners, and web pages.

The stand-alone warning applies to our use of images and infographics, too. Images to accompany text (to help communicate more while saving on page or character space, for example) may not always be displayed by apps or browsers, or may be shared separately out of context. Both image and accompanying text must meet relevant rules without relying on the other for compliance.

  • Check the grey areas

There’s no denying the fact that regulation in the financial industry is complex and that our use of social media can’t escape that. But rather than opting out altogether to avoid the risk of tripping up, or blurring over the complexities in a ‘hope for the best’ mentality, financial organisations simply need to plan ahead and factor in time to ask the right questions.

The guidance has been published to protect organisations from getting into trouble in grey areas. Who’s responsible for something that gets retweeted or shared? What about the international reach of a message? Is a social media message considered ‘an unsolicited real time activity’? What records do we need to keep?

Think about potential conflicts in compliance and if you’re not sure, then check. The guidance document is comprehensive and will help, so get to know it inside out.

How to do it right

So now we know the constraints, how do we make our social media activity something positive, safe and creative? We suggest you make the most of the following:

1. Use the right tools

Hubspot provides the perfect tool for financial institutions to help keep all their social media activity exemplary. By scheduling posts in advance, you’ll have time to check compliance and get messages signed-off in bulk. Hubspot also keeps track of where messages are used and shared. You’ll be better able to stay accountable, manage feedback, and make use of analytics to learn what’s working.

2. Use the right people

Agencies and marketing professionals with experience of financial regulatory restrictions are the ones who can best help you strike the balance between creativity and compliance. By finding imaginative ways to tailor your messages to fit the rules, financial marketing specialists – like our team at Talisman – can enable you to create effective social media campaigns that will powerfully enhance your brand, while steering you clear of all the pitfalls.

If you’re still unsure of how to navigate the FCA guidance to ensure compliant social media practice for your financial brand, do give us a call – we’d always be happy to talk you through it in more detail.