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SOCIAL MEDIA IS RISKY BUSINESS

SOCIAL MEDIA IS RISKY BUSINESS
Posted: Jul 24, 2018
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3 Things Boards Can Do To Protect Their CU's Reputation


[Editor's Note: This article was previously published on CUES' CCUBE, and has been modified.]

Credit unions have become more aware of the importance of having a strong online presence and many are equipping themselves with the information and talent needed to be successful. In fact, if you are succeeding in today’s business environment, chances are you have an online presence—and having a strong online presence dictates that you become an active participant in the world of social media.

With research showing that seven in 10 Americans are on social media today, and that four out of 10 (39 percent) consumers are influenced to purchase a financial product/service via social media, this channel continues to play a significant role in marketing strategies. International author and keynote speaker, Erik Qualman, summed it up aptly when he said, “We don’t have a choice on whether we do social media. The question is how well we do it.” 

As with all other business decisions, there are inherent risks in using social media, particularly when it is used as a channel for advertising a credit union’s products and services. For example, you run the risks of disclosing insufficient information about a credit card or HELOC promotion, omitting the NCUA advertising statement in a share account advertisement or using misleading language to make a product more appealing. 

Creating and distributing relevant and timely content, as well as monitoring and measuring engagement numbers are among the key ingredients in doing social media well. But much of that should be left to staff.

From the board level and equally important is protecting your credit union’s reputation in a space that oftentimes seems uncontrollable. This must be an ongoing concern for your credit union and must be prioritized from the board level down to be effective. So, what can you do to protect your credit union’s reputation in a social media era? 

Firstly, boards should ensure that social media is being used for the right purpose. This is different for an individual versus a business. It also varies based on the type of business. As a financial institution, your credit union’s purpose should be to share relevant content or information and engage with your membership, rather than using social media pages for direct advertising.

This leads to the second point: It is important for board members to be aware of relevant social media-related compliance issues, and to ensure that social media strategies are guided by them. For example, if your credit union runs an ad for its great loan rates in a magazine, and then tweets the same ad without any further information, your credit union may be in jeopardy of violating Regulation Z (Truth in Lending).

Oftentimes, social media managers are limited by the number of characters but must ensure that they at least include a link to additional information. Then they will be compliant with what is commonly known as the “one-click rule,” which allows for disclosures to be one click away. The Commentary to Sections 226.16(c) [open-end credit] and 226.24(d) [closed-end credit] state, ". . . A term triggering additional disclosures may be accompanied by a link that directly takes the consumer to the additional information".

So, when a credit union posts specific loan rates for example, more detailed information must be only one click away.

Thirdly, boards should request a social media strategy that outlines specific objectives, the budget needed to support it and periodic reports that provide updates on progress. These objectives will be unique to each credit union depending on its stage of social media maturity. Some possible objectives could be: growing followers, increasing traffic to your credit union’s product pages, number of click-throughs resulting in qualified leads, improving your engagement numbers and so on. It is important to note that including social media as an ongoing agenda item in audit committee meetings and risk and compliance discussions is not a bad idea.

To successfully manage your credit union’s social media presence, it is not enough to just hire someone with great Facebook, Twitter or Instagram skills. The department or person responsible should be trained and well-versed in your corporate objectives, brand identity and the compliance and regulatory issues that must guide day-to-day social media activities.

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Shelly-Ann Wilson Henry

Shelly-Ann Wilson HenryShelly-Ann Wilson Henry

In her role as PR & Communications Manager, Shelly-Ann plays a critical role in the development, distribution and management of the content that supports Trellance’s thought leadership agenda.

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