Financial Regulator Lays Down Social Guidelines
With digital/social media now becoming the leading choice in many cases for customer communications and specifically product promotions, the Financial Conduct Authority (FCA) has launched a consultation paper to clarify its position on the subject.
It is the second time the FCA has addressed this, having first published guidance in 2010.
The latest guidance includes many points that apply to all financial promotions. As with any other promotion, whether it is a billboard or a TV advertisement, the FCA insists the same principle of being “fair, clear and not misleading” must apply.
While social media can take many forms, including websites, blogs and pages on network sites, one of the most common forms of social media being used is tweeting, which has obvious size limitations.
The initial consternation that has been expressed by industry pundits has focused on this.
The FCA has recommended that any tweet by a company to promote a product should include the hashtag ‘#ad’ to highlight its nature.
Given the high and growing volume of financial promotions on Twitter it is probably fair to assume that ‘#ad’ will trend on a permanent basis.
Regulatory consultancy Bovill also points out that for a tweet to be fully compliant it will need to state: ‘Your money is at risk. This firm is authorised and regulated by the Financial Conduct Authority.’ Unfortunately, this will leave firms with just 40 characters to actually get their message across, which still has to remain clear and accurate.
The FCA suggests that one possible solution to the problem of character limitation is to insert images, including infographics into tweets, which also have to be compliant but they do allow relatively unrestricted information to be conveyed. Or firms can tweet a link to a website with a financial promotion.
A Tweet’s 140-character capacity is reduced to 117 with an image, or 118 with a web-link. If you use an image it makes sense to add a web-link to take users through to more information. Unfortunately, this reduces the word capacity to 95.
These problems won’t stop financial companies’ tweets. The industry has frequently demonstrated its capacity to find new and imaginative ways to reach existing and potential clients. This is merely the latest difficulty in the industry’s burgeoning relationship with social media, which will presumably evolve to accommodate a variety of industries’ marketing. To do so would certainly help the commercial interests of Twitter et al.