Companies, Charities, Professional Associations, Governments, Sporting Groups etc all face challenges if they are to benefit from Web 2.0 and beyond. It is clear that Social Media is the biggest change in the way we communicate since the invention of the Guttenburg Press over 400 years ago. But without a revised business model it is very difficult to reap the full rewards of open dialogue with clients, prospects, stakeholders etc ..
The Finance Industry is one group that clearly is having great issues in this area.
A recent survey conducted by On Wall Street and LederMark Communications into usage of Social Media/Networking by Finance Industry Proferssionals in the US clearly highlighted this. Of thise surveyed the adoption by the under 50s is very high – 85% using LinkedIn and/or Facebook and/or Twitter to build business.
And more than 40% of them claiming that it has led to doing business.With LinkedIn preferred for business connections and Facebook for personal matters.
But within the Finance sector compliance issues are a real barrier to doing business in this new world – especially at large financial institutions.
With a number of clients and prospects in this sector I see much debate and focus on how to work around the compliance issues. And as Gerri Leder, President of Leder Communications says – Younger professionals “are adopting social media at a feverish pace suggesting that we haven’t heard the last of this.”
The survey found that younger financial professionals are doing business at a rate of two to one when compared with their older counterparts, she said.
With the rapid growth of social media in Australia accoring to a very recent Niilsen survey comparing 2008 to 2009
- 9 million regularly use the Internet
- Reading messages on Twitter up 16% to 24%
- Interacting with a Company via a Social network up 15% to 38%
Many Australian firms are now working out how to best use the technology while not running the risk of regulatory reprisals.
The US survey found that the number one reason respondents didn’t use social media at or for work was because company policy prohibited it. The second reason was compliance concerns and the third, especially for the over-50 crowd, (not surprisingly) was lack of understanding of the sites.
Those who are able to use social media at work, are very limited in which they are allowed to do. Most are able to do little more than create a profile according to the survey.
Its seems that they are prohibited from doing the things most likely to generate business. They cannot post recommendations from clients or friends, they cannot blog or engage in discussions, or in some cases even link to their business website.
So we have an industry that can very clearly benefit more than most from building dialogue and developing trust that is hamstrung by regulations that pre date the Web 2.0 world!
This is a clear situation which highlights the need for new business models to harness a new form of communication. The old model clearly doesnt work and results in banning activities which would be beneficial to the industry and its clients.
The challenge is now for individual firms to find a way to legal;ly become thought leadres and drag the Industry with them… Those that take the risks and find the way will be clear winners in the Web 2.0 world.
The survey, conducted last month, included 175 financial services executives from national financial services firms, independent financial advisors, regional firms, asset management firms and others. The largest groups of respondents were financial advisors/brokers at 47% and registered investment advisors at 12.4%.
Meanwhile in January, FINRA released a regulatory notice on social media websites. In the notice, the self-regulatory agency stated that firms that intend to communicate or permit its “associated persons” to communicate through social media sites must first make sure that it can retain records of those communications. FINRA also stated that if a firm or its employees recommends securities through such a social media website, such an action may trigger the suitability rule and create “possible substantive liability for the firm or a registered representative.” In addition, FINRA said that firms, in certain circumstances, must supervise the communications by the firms and their reps on blogs and sites such as Twitter, LinkedIn and Facebook.
A clear case of we dont get it so we better kill it ??? Rather than here is a clear set of Plans, Policies and Guidelines for you to apply in your business so that you can fully capitalise on this new communications phenominon.
Interestingly the Institute of Chartered Accountants in Aust has a apopointed a manger of Digital Communications to provide advice to its members on how best to apply Social media etc to their business!!