The FCA and social media

OK, this isn’t the most exciting post. But it is important. The Financial Conduct Authority (FCA) has finally published its draft guidelines on the use of social media by financial services organisations.

There is some very sensible advice in the FCA guidelines. For instance they recommend identifying a tweet as a promotion by including the hashtag #ad.

However there are a number of illogicalities and omissions.

Take tweets. The FCA advise that promotional tweets for financial services need to contain a lengthy risk statement along the lines of, in the example they give, “Your capital is @risk & losses can exceed your deposits.” That’s 56 characters – getting on for half the characters available, and more than half once you have included a link to your products.

But why have a risk statement at all? Consumers don’t expect full information in a tweet. They expect to find more information behind any links. A more sensible rule would to be  to require the risk statement to appear on the landing page beneath the tweet. Alternatively perhaps a shorter statement leading to a risk statement along the lines of “Risks: [link]” should be allowed.

Perhaps they should think of a promotional tweet as being like the header of an email – something designed to persuade you to look for further information. Just as email headers don’t contain risk statements, why should tweets? Including one seems to offer no extra protection to consumers.

The FCA also mandates risk statements on banner ads. They give an example of an ad with three frames, the last of which contains a risk statement. But is this sensible advice? Consumers can’t be guaranteed to watch an animated banner until its completion. So what is the purpose of a risk statement in the final frame? Either the risk statement should be visible all the time – or it should be available on the landing page that links from the banner.

Another problem with the guidelines is the absence of any recognition that social media content can be either static or interactive. The FCA guidance states that social media content needs to be pre-authorised. While this is clearly possible for banners ads, blog posts and even promotional tweets, it is simply not practical for interactive content that takes place within an exchange of tweets for instance. Clearer guidance is needed here – US regulators such as Finra accept that “unscripted” interactions need a different kind of management.

Another weakness is the use of the word “significant” when describing content that needs archiving. This leaves a lot up to the financial services provider. What is “significant”? Surely sensible guidance would insist on all content available to consumers being archived, not a hard thing to achieve with a digital medium. 

My final major worry is that the FCA seem to think that awareness is not part of a promotional journey. Thus a tweet saying “To see our current mortgage offers, go to…” is not a promotion but a tweet saying “To see our great mortgage offers, go to…” is a promotion. Presumably the FCA are saying that “current” is not a word that promotes value? If it isn’t, then will the FCA provide a list of other words that are safe to use? It might be more logical to say that the inclusion of any adjective turns something from an invitation to look at information into a promotion. However, even without an adjective, an informational tweet that generates awareness is a promotion (remember AIDA?)

The FCA is asking for comments on these guidelines and will accept them until 6 November 2014. If you work in financial services marketing you will need to make your feelings known.

 

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