Social Networks Pervasive in Regulated Industries
A recent report in internet.com shows that the spread of social networks at the enterprise level is happening at a far greater rate than is generally believed, according to a report released by network security firm Palo Alto Networks.
The company is warning everyone that the broader use of social media sites like Facebook and Twitter, which have had their share of security issues, is far outpacing the ability of IT to control them. This is especially true in the financial industry where, as we know, the use of electronic communication is carefully regulated.
Social networking growth is especially happening at a higher rate in healthcare and financial services, both industries being highly regulated. The report states that 94 percent of companies in those two segments had connected to as many as 28 different social networks, ranging from Facebook and Twitter to LinkedIn and SharePoint.
Since financial services organizations are subject to FINRA regulations, they are required to control and monitor confidential data such as client records. The lack of visibility into social networking traffic could be a violation, or lead to violations, of compliance with industry rules and regulations. Of course, linkedFA was designed to address these issues in order to allow advisors to communicate with their clients compliantly using social media.
Says Chris King, director of product marketing at Palo Alto Networks: “Social networks are being used for marketing and other purposes, but company policies haven’t caught up with these Enterprise 2.0 services and businesses don’t have good visibility into how they’re being used. Any interaction with clients has to be kept for seven years.” But, according to the article, there are many applications, like chat in Facebook and Gmail that enable direct interaction outside the organization that is probably not being saved. It is only a matter of time until firm policies catch up to address these concerns and having an appropriate, viable solution is important.
Due to this, and given the fact that mainstream social networking sites don’t comply with industry regulations, many companies within the financial industry have prohibited the use of social media entirely.
We developed linkedFA with a sophisticated compliance tool that meets FINRA, SEC, and other regulatory body requirements, storing all communication for six years and enabling content review by compliance officers for all communication on the site. This enables FAs to leverage social media as a tool to connect with investors and grow their business in a safe and secure environment. Additionally, for wirehouse and brokerage firms, we offer an additional level of compliance, automatically generating daily reports on FA activity which is emailed to the compliance officer and integrates with existing email monitoring systems such as Live Office.