Social Identity in Business: Use of Personal versus Professional in Social Media

Sarah Carter

Today’s post is by Sarah Carter, General Manager of Social Business, Actiance. You may connect with Sarah on Twitter @sarahactiance or via LinkedIn.

Businesses are moving towards enabling their distributed teams to use social media for business purposes. It’s no wonder that one of the more common questions that gets asked of my team is how to separate the personal from the professional.  To a certain extent a lot of the answers here are generational and I firmly believe that in a few years time we’ll wonder what all the fuss was about.  But right now, there are clear concerns within business about what identity individuals should be using when on social.

Questions are raised on privacy, on the capture of content that is personal in nature, when the regulators and ediscovery experts are clear that they don’t want that – the nature of the content is what they’re concerned about.  So lets take a look at some clear steps that simplify this.

Clear guidance should be provided to the business and social users about the benefits and drawbacks of separating personal and professional identities. At the most basic level, firms should ensure that they do not work counter to the end user terms of use of the individual social networks to which they are providing access. Here at Actiance, we regularly monitor changes in the end user and third party developer’s agreements for the approved use of social networks. Each social network may need to be dealt with differently and terms and conditions may evolve over time.

LinkedIn

The account belongs to the end user, and the firm or organization that they work for is simply an element of their LinkedIn profile. If an end user has a current LinkedIn account, he or she should use that ‐ while adhering to the guidelines of the firm.  Creating a new LinkedIn profile for each position or organization you work for is NOT the way to go.

Facebook

Facebook recently relaxed its rules which previously stated that a “personal profile” could not be used for business. They have now inserted the word “primarily” into clause 4.4 of the end user terms of use. (You will not use your personal timeline primarily for your own commercial gain, and will use a Facebook Page for such purposes.)

Facebook does not provide any further guidance on the definition of “primarily.” While I believe engagement is far more effective on the personal profile, most firms are concerned about the capture and retention of personal content, and therefore, most firms utilize Facebook pages for their employee engagement. Because of this privacy concern that is shared by virtually every firm, we recommend that the individual sets up a Facebook page for business purposes.

Twitter

Create as many Twitter accounts as you want. Just remember which account you’re posting from!  Most engagement is received when the content shared is a mix of personal and business related content. That said, most firms advocate a clean account, branded as the firm is branded and that includes relevant disclaimers where the firm is clearly represented.

This is today…

In summary, these are the current trends and best practices at the present time. However, in social media, change is constant. Best practices change quickly (Facebook’s terms of use for instance), although LinkedIn’s policy in support of the end user is highly unlikely to change. The distinction between personal/professional will continue to evolve as we all become more socially mature, and will also be impacted also by the demographics of the individual users.  Clearly this is our best practice advice and advice gleaned from our work with clients, industry regulators and experience – what’s your view?  Personal, Professional or Is there no difference?

A Social Project Starts with the Business – Sample Stakeholder Questions

Today’s post is by Sarah Carter, General Manager of Social Business, Actiance. You may connect with Sarah on Twitter @sarahactiance or via LinkedIn.

As the General Manger of Social Business, my team and I work with many firms across the United States, Canada and Europe while they are making the decision to use social media for their business. Naturally, each firm is different, but they all share the common need to determine how they plan to use social media effectively within their organizations. Here at Actiance, we’ve learned that fully defining those needs and requirements helps support a successful launch of a social business.

Actiance begins each social media engagement and compliance project with a series of stakeholder interviews. These interviews draw out the business objectives for the project, in order that social is not viewed as a separate or an adjunct to the business. These questions are tailored specifically for the business – whether that business is wealth management, business or retail banking, a mortgage or an insurance business. We believe that by including all the relevant stakeholders for the business – from the financial adviser, insurance agent, mortgage broker, social media team, compliance representatives and technology liaisons the business and project will benefit right from the start.

• Who are your primary competitors? (names of companies)
• Is there anything that your primary competitors do significantly differently than you?
• Are they on social?
• What are your Business Priorities for the next 6 ‐12 months? (Maintain clients? Grow existing clients? Attract new clients?)
• What is your sales and marketing plan? Who is executing that?
• What marketing materials are used? (Brochures? Promotions? What about outreach or inbound?)
• What are the major challenges with the business? (Churn? Attracting new clients?)
• Are any of your users currently “social”?
• How “social” are your users now? For example, for users currently using LinkedIn, how would you rank their social media presence on a scale of 1‐4 (where 4 = socially mature)? What about other networks such as Twitter, or a websites, a blogs?)
• What initial thoughts do you have on which networks might be used for a pilot, and why?
• What time commitment are the end users likely to give to social per week? (30 minutes? 60 minutes 90 minutes?)
• How many clients are your users currently connected to?
• What type of content do you currently share with clients?
• What medium is used?
• How often is content shared?
• Can existing content be leveraged?
• Does your firm share non business content, such as your philanthropic works? Local events and news?
• Who creates the content?
• What does a successful social launch look like?
• What are your goals? Metrics? ROI?

Of course interpretation of the answers, and building that into a full business plan is what takes experience, but by uncovering the needs of each group, defining metrics for success, and developing a plan that meets the unique needs of your organization, we’ve found that firms are more successful when they launch social business. Is it time consuming? Absolutely. But is it worth it? You bet!

Belbey Blogs: FINRA Spot Checks Call for Social Planning

Joanna Belbey is a social media and compliance specialist with Actiance. You can follow her on Twitter @Belbey

The FINRA notification last week — that the regulator will spot-check social media communications of its members — shouldn’t come as a terrible surprise to the industry.

FINRA and other regulators within the U.S. and worldwide, have consistently conveyed that social media is just another form of written communications and ought to be treated as such. For the last three years the regulator has also provided increasingly specific guidance to help firms interpret existing rules and regulations both in Regulatory Notices (10-06, 11-39, 12-29) and at multiple conferences.

The announcement that social media would be included in examinations is further validation of the growing use of social within the financial sector to communicate with clients. It also underscores the need for firms to thoughtfully develop clear policies on the use and methodology to supervise and manage usage, content and engagement.

Firms need to demonstrate they have identified and mitigated risks that include data leakage, incoming threats, legal and compliance and user behavior, before they tap the opportunity of social media. Firms will require detailed usage policies, effective user training and technology to enforce both.

The good news for firms is that FINRA’s June Targeted Examination Letter outlines the information firms should be prepared to show an examiner. Information includes the rationale of why the firm is using social media, details about the sites the firm is using, how the sites are being used, supervisory, monitoring and training procedures, and a list of the top 20 producing registered representatives using social media to interact with retail customers, including which networks they are using, their full names, CRD number, and dollar amount of sales and commissions.

The first step in creating effective policies is to leverage the following industry best practices:

• Spark a conversation, don’t pitch a product. Just as pitching products or making investment recommendations is problematic for the regulators due to suitability requirements for a registered person, it’s also the fastest way to turn off your followers on social media. A better approach is to create compelling content that attracts your audience’s interest, is useful and promotes engagement.
• Educate and train advisors. The regulators agree that training on appropriate use of social media is essential. This requires training that includes compliance and regulatory requirements, but training shouldn’t stop there. Education should also show users how to share their own insights, in their own voice.
• Be authentic. Authenticity is a key to social media success. Your financial advisors are taught how to speak effectively, how to sell over the telephone and work with email. Similarly, they need to learn how to use social effectively.

By creating a solid social media policy, putting technology controls in place and carefully training employees to be social, you will not only develop a winning social media program, you will be ready for FINRA’s spot checks.

Today’s blog post previously appeared in Financial Planning and Bank Investment Consultant on June 24, 2013.

Experience Matters: Working with Actiance

Today’s post comes from Victor Gaxiola, Social Media Subject Matter Expert at Actiance

I recently celebrated my one-year anniversary as part of Team Actiance and was reflecting on how much change I have seen in the approach financial services organizations are taking with regard to social media.  Whereas before most companies approached social media as an obstacle to be tacked, today they are more inclined to see it as an opportunity to adopt.

This shift was validated for me this past month at our recent Unleash Summit in New York City.  On Friday, we held a separate breakout we called the “Social Media Un-Conference” that was facilitated by our Social Business Team.  The purpose of the un-conference was to allow our participants to drive the agenda and the topics we would discuss as a group.   During the session I noticed that the conversations centered less and less on WHY organizations should be part of social media and focused more on HOW they could be better.   There was a curiosity to exlore best practices, and who is doing it right in the financial services space.  What stories are being told, who’s having success, and what’s next?  This isn’t new news and I’ve written about this before, however the reality is that more and more stakeholders  have bought in and are understanding the the need to embrace a social strategy.

Those of us with experience know that social does so much more than provide an additional channel for your branding message.   Used right, social helps organizations provide better customer service, bridge the advisor and client relationship, and position professionals to be more competitive in the marketplace. I see this shift as encouraging, and working with a leading provider of compliant social media solutions, I  look forward to working with more firms as they seek a partner to help them with the creation and deployment of their strategy.

Undoubtedly many questions still remain as advisors explore how a digital strategy will make a difference in the development of business that will lead to an increased bottom line.  Some of the questions we heard at our summit include:

What are the best practices for social engagement?

How can you create and manage content for different audiences?

What are some of the case studies of success that illustrate the true ROI of a social strategy?

How can you leverage social media to find high net worth individuals?

Over time we will address questions like these on our blog and will likely find them within the collective intelligence of those organizations that are already leveraging social media. Remember, within financial services social media is VERY new and there will be more questions than answers. This is to be expected.

In reality, social media in general is still a very new field.  LinkedIn just celebrated it’s 10th birthday so that makes it a pre-teen or tween.  Facebook and Twitter are not too far behind.   Corporate marketing and sales departments in the retail and entertainment sectors have had the most success thus far in building a loyal following among social media users.  The collective body of knowledge on what works, and what doesn’t is built on experiences shared in webinars, ebooks and by industry speakers.  I participate regularly in these events to learn what is happening in social media in general and then apply what I’ve learned to this unique financial social media eco-system.   As much as I stay in touch and learn about the advances in existing platforms like Facebook, LinkedIn and Twitter, new platforms like Instagram, FourSquare and Vine continue to challenge the status quo.   We are all learning as move forward….together.

That being said, the growth of financial social media and the attention it generates has brought new risks. I am not talking about the risk one would normally consider from a compliance or regulatory perspective because that’s well documented and understood.  The additional risk that it poses is that newness of social media in financial services is attracting a wave of social media “gurus” and “‘experts” that are looking to gain your attention and business to show you the way.  Buyer Beware!   Many of these self proclaimed “experts” do not have a real understanding or appreciation for the challenge of working withing the framework of our regulated financial services world, and as such are likely to distract you more than help you.

One of the benefits of working with Actiance is that our social team was created by the careful selection of individuals with a deep understanding of the challenges of the industry.  As many of you may know, I used to work as a financial consultant and in my six years working in the field learned what it means to prospect and work with clients in a challenging and often shifting financial market.   This experience has helped me provide better guidance on how to approach social media and leverage it to improve customers service and the bottom line.

Some of you may also know my colleague Joanna Belbey who worked with FINRA and is our resident expert on all things dealing with compliance and regulations. I like to think of Joanna and I as the yin-yang of the client experience. Whereas she is focused on risk mitigation, I am focused on opportunity.  We work well together, and as a result can address most client concerns.

Earlier this year we welcomed Greg Lowe to our team who has made an immediate impact by providing a high level review of our processes and streamlining our approach to the Actiance pilot program.  His background in the collaboration space has helped provide the structure necessary to manage the opportunity with the delivery.   He’s a straight shooter and the backbone of our team, keeping us focused and grounded. Not an easy task.

Finally, many of you know the fearless leader of our social team Sarah Carter, who is an encylopedia of knowledge and understands this business inside and out. Sarah fully understands how to balance the needs to address technical concerns as well as those from various lines of business. Her passion for social media is only second to bacon and a strong breeze when she sails the San Francisco Bay.

Collectively our team is aware of the regulatory, business, and back-office challenges that any organizational faces with the adoption of social strategy. It is one of the reasons why we are heavily involved in the initial discussions with multiple stakeholders to understand the business needs and requirements of an organization as it considers and devlops its social media strategy.

Implementation of the solution requires an understanding of this environment and the challenges you are likely to face. Given our experience of working with multiple clients we understand the tools necessary for effective training, best practices for increased adoption, and how to work with multiple stakeholders across different lines of business in the rollout and adoption of a social plan.

If you look through my resume you will discover that I have always worked for large organizations where the management structure defined processes.  Often there were multiple layers or stakeholders to reach a decision, and that required time to take action. Actiance has been the smallest company I’ve worked for, and I relish the opportunity to work with our team to react to customer needs and enhancements much quicker than a larger organization would. At Actiance we’ve been working to provide solutions and processes to assist regulated industries for over a decade and the creation of a social solution was the natural evolution of our existing platform. The strength of our collaboration and teamwork has fostered an environment that operates like a startup, however enjoys the legacy and experience that makes us the best in this space.

So as I celebrate one year with Team Actiance, I just thought I’d share why I think we are special.  I had some reservations posting something that would come across as overly commercial and self serving, but it’s what I am most proud of when I share what I do and who I work for at conferences or  with new prospects.  I think people want to know what makes you special.  At Actiance- it’s the people, it’s the experience, and it’s the breadth of knowledge and understanding of what it means to work in this challenging and constantly changing industry.

So if you are exploring a social strategy and are serious about making a decision to move forward, I invite you to consider us- Team Actiance.  We are ready to take you to the next level of social adoption.  Are you?

Belbey Blogs: FINRA Annual Conference 2013 – Part III of III (Ask FINRA Senior Staff, Social Media Considerations, and Communications with the Public)

Today’s blog is authored by Joanna Belbey, Social Media and Compliance Specialist, Actiance. Follow Joanna @Belbey or connect with her on LinkedIn.

To continue with my prior blogs Belbey Blogs: FINRA Annual Conference 2013 – Part I of III (Suitability, Elisse Walter, Fraud) and Belbey Blogs: FINRA Annual Conference 2013 – Part II of III (Cyber Security, Using Social Media Tools), this is the third in a three part series that highlights the sessions that I attended:

FINRA Annual Conference (Part III of III)

Ask FINRA Senior Staff session

This is a popular session where the live and virtual audiences pose questions to a stage full of regulators.  Topics are varied, but there was some discussion regarding social media.

Tom Selman, EVP FINRA Regulatory Policy, explained that some states have recently enacted legislation that limits how a firm may monitor employees’ personal use of social media. In response, FINRA is working with the states to explain the importance of allowing supervision of social media used for business purposes by regulated persons. As a result, a number of states have added an exemption for financial services. However, at the end of the day, if certain states prohibit firms from supervising regulated persons using social media, than employees in those states should be prohibited from using social media.

Social Media Considerations session

At this point, it’s been three years since FINRA has provided guidance of the use of social media by regulated persons. This panel provided an overview of regulatory guidance (FINRA Regulatory Notice 10-06, 11-39, 11-29) and then focused on four reoccurring questions impacting social media: Recordkeeping, Supervision, Third Party Content, and Training.

One topic included additional guidance on regulatory requirements for third party content.  Joseph Price, SVP and Counsel FINRA Corporate Financing / Advertising Regulation stated that hyperlinks to a third party site require advance due diligence, as by drawing attention to third party content, you have “adopted” it and therefore record keeping and suitability requirements apply. (Editor’s Note: “Adoption” and “Engagement” is a SEC concept defining the relationship and associated responsibility when sharing content from a third party. Without going into legal details here, adoption is akin to using someone else’s content “as is” and “entanglement” refers to when you participated in the creation of the content.) Price continued, if your firm links to a specific article, you are only responsible for that article, not the entire site. (Editor’s Note: That being said, caution is advised. Best to stick with reputable websites.)

Debbi Corej, Specialist Leader, Deloitte& Touche LLP, noted that adoption of social media was still low and stressed the importance of developing plans in advance. Corey suggested that compliance departments draw the line between personal and professional usage for their employees and registered persons, develop processes, training, and attestations, include social media in annual meetings and focus on red flags.

Another topic was the handling of videos. FINRA gave an example that if a public appearance is recorded and the reused for marketing, it become sales literature and preapproval and supervision apply.

The panel also discussed endorsements on LinkedIn. It was suggested that as a best practice it is best to hide skills endorsements entirely to avoid the impression of a testimonial (Editor’s Note: Testimonials are prohibited for Investment Advisors and the difficult to justify for Registered Representatives.  Broker Dealers typically outright prohibit or are very careful when allowing testimonials). As per Amy Sochard, Director FINRA Advertising Regulation, if you “groom” endorsements, you’ve “adopted” the ones you’ve left on the site. Alexander Gavis, Vice President and Associate General Counsel, Fidelity Investments added when it comes to social media “Use policy or technology, preferably both”.

Finally, Price reminded the audience that interpretation of the rules and regulations is based on the risk tolerance and culture of compliance at each firm, and concluded that “It’s ok for firms to have policies more conservative than the Guidance to protect their reputation”.

For those of you who are just getting started, here are some of the resources that were provided at this session:

FINRA Regulatory Notices:

FINRA Regulatory Notice 11-39, Guidance on Social Networking Communications (August 2011)

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p124186.pdf

FINRA Regulatory Notice 10-06, Guidance on Blogs and Social Networking (January 2010)

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p120779.pdf

SEC Resources

Securities Exchange Act Release No. 69279 (April 2, 2013) (Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: Netflix, Inc., and Reed Hastings)

http://www.sec.gov/litigation/investreport/34-69279.pdf

IM Guidance Update: Filing Requirements for Certain Electronic Communications (March 2013)

http://www.sec.gov/divisions/investment/guidance/im-guidance-update-filing-requirements-for-certain-electronic-communications.pdf

Communications with the Public session

This session addressed some of the specific questions around the communications rules that became effective in February. As it was covered at other sessions, social media was mostly excluded. See Belbey Blog: New FINRA Communications Rule 2210  for more information. In general, the audience learned that leading communications volitions were failure to disclose a firm name, not fair or unbalanced communications, information that was misleading or exaggerated, material information in the footnotes and various SEC Rule 482 violations. The panel stated that supervision of communications should be flexible and risk-based and that proper training, surveillance, and follow-thru to correct issues was important. Specifically for public appearances, training, documentation and an occasional in-person spot check was suggested.

And finally, per FINRA Rule 2210, interactive social media communications were exempted from filing. See Belbey Blogs: Recent Guidnace from the SEC on Filing of Social Media for more details on that topic.

That’s it! I hope you found these highlights helpful and that I see you at FINRA Advertising Regulation Conference on October 10–11, 2013 in Washington DC.

Belbey Blogs: FINRA Annual Conference 2013 – Part II of III (Cyber Security, Using Social Media Tools)

Today’s blog is authored by Joanna Belbey, Social Media and Compliance Specialist, Actiance. Follow Joanna @Belbey or connect with her on LinkedIn.

To continue with my prior blog, Belbey Blogs: FINRA Annual Conference 2013 – Part I of III (Suitability, Elisse Walter, Fraud) here are the highlights of the sessions that I attended at the FINRA Annual Conference:

FINRA Annual Conference 2013 – Part II of III

Cyber Security session

The threats from cybercrime are increasing and constantly evolving. They are particularly dangerous for small broker dealers, as 60% of small firms go out of business after a cybercrime. There is no comprehensive federal law that exists to govern policy and a patchwork of state laws. However, 47 states have breach notification laws pertaining to unauthorized access to Personally Identified Information (PII). PII typically includes first name, last name, social security, account and driver’s license numbers.  Basic privacy protection principles include: providing notice of policies, allowing customers a choice to consent to their data being captured, access to participation, integrity and security of the data and enforcement and redress of a breach. Laurie Dzien, Chief Privacy Officer and Associate General Counsel from the FINRA Office of General Counsel, advises firms to 1) know and classify their data, 2) analyze appropriateness of access to PII, 3) collect only the data that is required and 4) destroy what you no longer need, 5) create a team to quickly handle data breaches before they happen, 6) conduct careful due diligence of third party vendors, and 7) create an information security incident response plan (team, communications, procedures, train and access effectiveness of response).

Denise Watson, Manager, Operational Risk & Privacy from Raymond James reiterated that firms need processes and controls in place for data protection and privacy. She offered some practical warnings as well. Your firm may need to wipe some printers’ hard drives before disposal and to unplug fax machines at night to avoid data leakage.

And finally, Gilbert “Gib” Sorebo of SAIC suggested that “firms should stay on top of evolving threats, engage cyber experts and secure your systems”.  Or simply put, Sorebo says “Don’t be the easiest to pick.”

Using Social Media Tools (Small Firm Focus) session

Back 20 years ago, firms were very careful and adopted email slowly. The same holds true for social media today. This seems particularly true for small firms if this session is any indication. From a show of hands in the room, very few of the attendees of this session were participating in social media. In fact when polled, (Editor’s Note: Yes, they used polling at the FINRA Annual Conference!), 33% of the audience chose “I wish the Facebook guy was never born”.  Mitchell Atkins, SVP and Regional Director for FINRA South Region confirmed low adoption for small firms saying, “Very few FAs are actually using social media, even though they have been approved by their firms. However a few have gone off the reservation.”

The overall theme of the session was that if you use social media for business at all, all the rules and regulations around record keeping, advertising and supervision apply. Per Atkins, firms also need processes in place to handle customer complaints and a possible social media crisis. It was also suggested that interns could use social media to search for FAs outside activities. Education, predefined processes and thoughtful compliance are essential. Or as Hardeep Walia, Chief Executive Officer, Motif Investing said  “When using social media and thinking ‘compliance’, it pays to be paranoid.”

My personal favorite moment of this session was when Patricia Bartholomew, Managing Partner, General Counsel and Chief Compliance Officer of Craig-Hallum Capital Group gave me a big shout out to follow my tweets for a summary of the session (@Belbey).

For more on the FINRA Annual Conference, check back here Friday for Belbey Blogs: FINRA Annual Conference 2013 – Part III of III (Ask FINRA Senior Staff, Social Media Considerations, and Communications with the Public).

PS. For those of you who are just getting started, here are resources that were provided at this session:

FINRA Regulatory Notices:

FINRA Regulatory Notice 11-39, Guidance on Social Networking Communications (August 2011)

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p124186.pdf

FINRA Regulatory Notice 10-06, Guidance on Blogs and Social Networking (January 2010)

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p120779.pdf

SEC Resources

Securities Exchange Act Release No. 69279 (April 2, 2013) (Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: Netflix, Inc., and Reed Hastings)

http://www.sec.gov/litigation/investreport/34-69279.pdf

IM Guidance Update: Filing Requirements for Certain Electronic Communications (March 2013)

http://www.sec.gov/divisions/investment/guidance/im-guidance-update-filing-requirements-for-certain-electronic-communications.pdf

Belbey Blogs: FINRA Annual Conference 2013 – Part I of III (Sessions: Suitability, Elisse Walter, Fraud)

Today’s blog is authored by Joanna Belbey, Social Media and Compliance Specialist, Actiance. Follow Joanna @Belbey or connect with her on LinkedIn.

Of all the conferences that I attend, the FINRA Annual Conference is my favorite…

From a personal point of view, I get to spend three days with former colleagues, which are some of my favorite people, ever. I also don’t have a speaking role, so there are no butterflies in my stomach. It’s so well organized, that as an exhibitor, I just show up at the Actiance booth and smile. The food is always great and this year FINRA even introduced an app. The app made it easy to create and follow a schedule, plus provided links to the session handouts. No more big conference book to lug around. As a former colleague told me, “We strive to make improvements and offer something new each year.”

Of course professionally, attending the FINRA Annual Conference is a great way to catch up with clients and hear how member firms are interpreting and rules and regulations and pose questions directly to the regulators. There wasn’t a lot new this year, mostly reinforcing what we already knew.

This is the first in a three part series that highlights the sessions that I attended:

Suitability session

Suitability goes to the core of the business. Firms must demonstrate reasonable due diligence in collecting information about clients so that they “Know Your Customer” (KYC). Financial Advisors must understand the investing goals of their clients so that they may make informed recommendations. FAs also must be trained so that they understand what they are selling, especially with the rise of complex products. And as you get more specific, the suitability rules kick in. As one of the panelists, Daniel Kosowsky, Managing Director of Morgan Stanley Wealth Management summarized, “Suitability has been the hallmark of the broker dealer compliance all along”.

Conversation with Elisse Walter, Commissioner, Securities and Exchange Commission session

Commissioner Walter reiterated the SEC stance that there should be a uniform fiduciary rule for Financial Advisors and that there should be equal protection for investors. (Editor’s Note:  “Financial Advisors” is a general term that includes both Registered Representatives (RRs) and Investment Advisors (IAs). Not only are RRs and IAs governed by different regulators, they are currently held to a different standard when making recommendations to their clients.) Walter also conveyed that Chief Compliance Officers (CCOs) are the guardians of the public interest and should report directly to Senior Management. She warned that CCOs should be forthright with management and “stick to their guns” or face the consequences. Walters (as well as Richard Ketchum, Chairman and CEO of FINRA)  in another session), shared her concern about investors in fixed income who may not understand the relationship between interest rates and earnings. She advised that investor education is needed before the rates go up.

Fraud Protection session

There are increasing opportunities for fraud. These include social media, crowdfunding, real estate (REITs) IPOs, venture capital and market volatility in general. Some specific examples include how hacking social media accounts can move markets, criminals taking advantage of self-directed IRAs and takeovers caused by customers clicking on links that compromise their accounts.

Or in other words, “More methods for bad guys to commit fraud”, per Cameron Funkhouser, EVP FINRA Office of Fraud Detection and Market Intelligence.  But, “We try to get ‘em at FINRA. Investor protection is key”.

For more on the FINRA Annual Conference, check back here on Wednesday for  Belbey Blogs: FINRA Annual Conference 2013 – Part II of III (Cyber Security, Using Social Media Tools) and Friday for Belbey Blogs: FINRA Annual Conference 2013 – Part III of III (Ask FINRA Senior Staff, Social Media Considerations, and Communications with the Public).

Turning No into Yes #TLTActiance

This Thursday’s Thought Leader Actiance (#TLTActiance) guest blog is from Stephanie Holmes-Winton, Halifax-based financial services educator and author of Defusing the Debt Bomb. Connect with Stephanie or The Money Finder, on Twitter, LinkedIn or Facebook.

If you are in financial services you are probably governed by various rules when it comes to what you are and are not allowed to do when it comes to social media. And many in the industry say they’ve just given up. “Why bother, twitter is just a bunch of people posting pictures of their lunch!” uttered a Canadian advisor who says he’s not allowed on social media.

Guess what? His dealer does allow their advisors to use social media; I know this because I’ve worked with more than one of his colleagues who have indeed gotten approval for just that.

Now if you go and ask this advisor, I’m sure he’d insist that the answer was no. I bet you it was. But did you know there are two different types of “no”? I learned about the two types of “no” by arguing with my mother as a teen.

The two types of “no”:

There’s the “no” that means: Absolutely not, under no circumstances you CANNOT do ___________ (fill in the offending request)!

Then there’s the “no” that means: You haven’t given enough information to get a yes. You asked a closed-ended question. You didn’t ask about exactly what you want to do in detail, so as to give an idea of the scope of your request.

Example questions to ask managers or compliance:

How to get a “no”:

“May I commit fraud?”

That would get a Type 1.

“May I use social media?”

In many cases if this gets a “no”, it’s a Type 2.

 How to get to the next step, or a “yes”:

 “How would I go about getting started with social media?”

 “What kind of plan, outline or materials do you need to see from me so I can get started writing a monthly blog?”

 “What kinds of materials shared on social media (e.g. My own blog, an interesting publically available article from WSJ or conversations with followers) do you need to see in advance?”

 “What is your procedure to monitor my social media activities?”

 You get the drift, right? It’s not what you are asking but the way you are asking. And I think some people are even asking like this:

“I’m not allowed to use social media, right?”

Oh wait, I forgot a very important type of no: the above would get a Type 3 “no”, the type you actually frame your question hoping to get! I know, it’s one more thing. and it seems really big and really challenging, but hear me on social media; your client is there. You can gain amazing insights and information there. This is NOT A FAD.

Take a page from Daniel Pink’s new book To Sell is Human and try a little perspective-taking when you are pitching your social media use. Put yourself in their shoes. What are they afraid will happen? How can you help them mitigate the risk?

Understand compliance is there to do a job, and the easier you make their job, the better off you’ll both be. I’ve heard the jokes about how the compliance department is really the “sales prevention department.” But the truth is that there will be no jobs in compliance if there are no sales, so your relationship with them is more symbiotic than you may think!

There is a healthy compliant balance that can be found where financial services professionals can and should use social media. All we have to do is learn to ask the right questions.

Transaction banking is the ‘new’ sexy #TLTActiance

This Thursday’s Thought Leader Actiance (#TLTActiance) guest blog is by Elizabeth Lumley, special projects editor at financial services newswire Finextra, based in London. Follow her on Twitter @LizLum

According to research from the Boston Consulting Group, revenues from global transaction banking are expected to grow from $189 billion in 2011 to $509 billion in 2021 – an increase of 170%.

This renewed focus on the transaction bank has brought up several key trends. To highlight these I’m going to look at two trends from Finextra’s Global Banking Transaction Survey.

Most banks are combining cash management, payments, trade finance (and sometimes securities services) into one business unit.

Almost 90% of the banks surveyed in 2012 have created a transaction banking group, combining these business, or plan to in the near future. That number has grown exponentially. In 2010, 57% of those surveyed had merged, or were planning to merge, their trade finance and cash management business. That rose to 77% in 2011.

Now, there are a few issues I have with these statistics. And it’s from a technical, rather than a business strategy standpoint.  

The client-facing sides of the bank are now concerned with this idea of ‘customer-centricity’. Banks need a ‘customer view’ of their services, not a product-view of their services. Why?

So that banks can enable a stronger strategic focus on customer service, channel and product innovation. So that banks can ‘cross-sell’ their services. It is not a giant leap to suggest to a cash management client, that ‘oh by the way…we also offer supply chain.’

However, saying that a bank is now ‘customer-focused’ rather than product-focused, is very different from re-engineering decade’s old, legacy-heavy, enterprise-wide infrastructure that has been aligned along product lines.

Piecing together your old ‘product’ systems with some dodgy middleware, sticky tape and chewing gum, or moving your cash management guys to the same floor of the building as your trade finance gals – does not mean you are now operating in a serene, holistic, IT paradise (complete with angels and cotton candy.)

In 2013, most banks ‘want’ to combine their business under the neatly packaged ‘transaction banking’ umbrella – because of all the reasons cited including ‘better press’. (I mean who will admit, to the media, that their business is struggling to cope with changes in customer behaviour; with ageing systems that were probably built when people thought having a phone in your car was the height of innovation?)

But many banks are still struggling with real issues concerning complexity their IT environments. In fact 57 per cent of respondents, to the survey, said IT and system complexity is a hindrance. Any business within the bank, can offer cool, smart, innovative products – but if the infrastructure supporting them is, for lack of a better word…creaky, then the whole house of cards will fall apart.

Mobile channel development is a growing trend, with 45 per cent of banks ranking this a priority in the coming year, while 63 per cent said expanding self-service channels such as mobile would be part of their strategy over the next three years.

Conservative IT people – and let’s face it most bank IT people aren’t your young guns in hipster jeans and retro glasses (not that I’m saying that’s a bad thing) – tend to deal with innovation in terms of ‘products’. The digital revolution that has been going on around us, in the consumer world, is often seen in banking as a mobile revolution.

The questions that are being asked in innovation and development teams right now are:

• How do you get payments on the phone? 
• How do you engineer a ‘Wallet’ on the phone?
• How do you allow a corporate treasurer to authorise a payment on the phone?

This is the ‘mobile as a channel’ view of the world – which has led many banks to make the mistake of trying to shove the online banking experience into the mobile. (Or to shove the card onto the phone via NFC)

You should not think of mobile as a channel, but think of it as the channel. Whether you’re a retail customer or a corporate customer – you’re not looking for banking services ‘on a mobile’ you are looking for ‘mobile banking services.’ There’s a difference.

The cell phone, tablet or smart phone is merely the device of today.

According to last year’s Capgemini World Payments Report only two percent of mobile phone users have ever made a payment using their phone. Customers are not crying out for more apps – where they are moving towards is being able to access banking and payments services wherever they are.

It is people who are mobile. If your innovation strategy is bogged down with the device – it will move in the wrong direction.

That revolution in consumer banking is having an immediate impact on what corporate customers are demanding from their banks and how banks plan on focusing their investment in innovation.

Elizabeth Lumley is a global specialist commentator on services, regulations, risk, data and technology in investment, retail, and global transactional banking. She is an internationally recognised reporter, tweeter, blogger and broadcast journalist. Elizabeth Lumley is currently special projects editor at financial services newswire Finextra, based in London, where she is responsible for all the multi-media output.

What’s the Buzz? Tell Me What’s Happening

The buzz in the enterprise is Big Data. Pick up any publication covering technology or business these days and you will see articles about the proliferation of Big Data; how it happens and how it will impact our lives. Certainly, there is a ton of data flooding in, offering tremendous opportunity to predict new trends that can drive our business in exciting ways. But there are two important steps in the harnessing of Big Data to achieve its potential. First you have capture and store the data; second you need to analyze the data. Once you have visibility you can ‘listen’ to trends generated by your customers and marketplace.

But, while most companies are listening to what customers are saying, they’re often not listening to what their employees are saying.

The old adage “the CEO is the last to know” no longer has to hold true. Big Data can help you learn about your employees’ experiences as much as the customer experience. If we can leverage Big Data to create an experience for the customer that exceeds their expectations and results in higher satisfaction, can we not use Big Data to achieve the same with our employees?

With Big Data we can change how we engage our employees. We can understand the trending themes, the sentiment, who the key “connectors” and subject matter experts are, and even the high risk areas. We can safely project that this will result in:

• Higher job satisfaction
• A more engaged, enthusiastic workforce
• Longer employee retention
• Better productivity

Not unlike the customer experience we can create with insights from Big Data, we can create a better employee experience that results in a positive, transparent and more productive work environment. All of which gives us a competitive edge.

Isn’t that really the potential of Big Data for the enterprise?