Social media’s open nature has made for late adopters in certain industries that are highly regulated. Much like pharmaceutical companies, the financial industry has been slow to join social networks like Facebook and LinkedIn. A recent study however, shows that more brokerages and investment advisers are using social media for the marketing advantages it provides, and the numbers are expected to continue to increase. According to Smarsh, requests to financial services firms for social media data during regulatory examinations in 2010 rose 65% over previous years.
Problems arise in this industry due to the regulations that companies create, and how well enforced those regulations are. Consider this, 40% of organizations lack guidelines for social media use in the workplace. One of the main concerns in the financial industry is the fact that messages and information sent via social networks are not saved and accounted for. Furthermore there are generally many regulations between adviser and client relations and these policies don’t transfer to social media.
The marketing opportunities possible in social media make getting involved in it an attractive business move. However, for those who have strict rules regarding their industries it is important for companies to develop guidelines that are in line with official regulations. Creating new rules specific to the financial industry will definitely be required in the near future.
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