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Regulation Amp Governance
Teach bankers how to tweet, says charter
From the Financial Times of Thu, 11 Dec 2014 16:25:07 GMT
People holding mobile phones are silhouetted against a backdrop on which the Twitter logo is projected, in this file picture illustration taken in Warsaw on September 27, 2013. Twitter Inc is marching towards this year's most anticipated initial public offering in the U.S., and is expected to begin trading on the New York Stock Exchange in mid-November. According to a Reuters/Ipsos poll, 36 percent of 1,067 people who have joined Twitter say they do not use it, and 7 percent say they have shut their account. REUTERS/Kacper Pempel/Files (POLAND - Tags: BUSINESS TELECOMS LOGO)©Reuters

Bankers could be trained in how to use Twitter, and have clauses about social media behaviour inserted into their employment contracts, under new guidelines being developed in consultation with the Financial Conduct Authority.

In recent years, the financial industry has been a relative laggard in embracing social media platforms, such as Twitter — aware that it is a double-edged sword that has scarred companies from JPMorgan to American Airlines.

But, in London on Thursday, it launched The Social Media Charter: a set of standards designed to avoid future blunders. Banks, including the UK arms of HSBC and Citibank, as well as the fund management group Threadneedle, have already given the charter their broad support. Although its guidelines are not sanctioned by regulators, including the FCA, backers hope that compliance with them may help mitigate the risk of fines.

“It is obvious that the financial services industry has to ensure that social media is only used in a responsible manner to avoid further mishaps,” said Citi’s vice-chairman of Emea Banking, Stuart Popham.

Kitty Parry, founder of public relations firm Templars Communications, which has led the Charter, said: “Pension funds are asking about the social media policies of the hedge funds they invest in… It’s coming up in due diligence.”

This summer, the FCA had been due to publish its own guidance about social media use, but instead issued a consultation paper, and has been in contact with the Charter founders.

Regulatory scrutiny has followed incidents in which Facebook, Twitter and other networks have proved something of a Trojan horse for banks.

JPMorgan cancelled a planned question and answer session last year, after its hashtag AskJPM became a lightning rod for discontent about the US bank. “As a young sociopath, how can I succeed in finance?” read one of more than 5,000 negative tweets using the hashtag. Eventually, JPMorgan was forced into a meek U-turn, admitting “Bad Idea. Back to the drawing board”.

Last month, even one of Twitter’s own executives, the former Goldman Sachs banker Anthony Noto, came a cropper on the social networking site, when he accidentally revealed that the company should make an acquisition.

“I still think we should buy them. He is on your schedule for Dec 15 or 16 — we will need to sell him. I have a plan,” he said in a message that was presumably meant to be private. It was swiftly deleted.

Private social media users have long hidden behind disclaimers, such as “retweets do not equal endorsements”. But the Charter makes clear banks will be held to a higher standard — even retweeting, liking or sharing a post could count as a communication with a client, and must therefore be “fair, clear and not misleading”.

“Our customers are increasingly choosing to communicate with us using social media so it’s desirable that we have clear standards to meet their expectations,” said Antonio Simoes, UK chief executive of HSBC.

However, bank compliance departments have struggled to authorise marketing communications via social media, because there are no specific regulatory guidelines in the UK.

“It’s like trying to take a penalty kick, but you don’t know how big the goal is,” said Paul Armstrong, a digital consultant at Here/Forth. “Everyone’s waiting for the FCA to drop the bomb on what you can and can’t do.”

Companies can apply to be certified under the The Social Media Charter, once they have implemented its recommendations.

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