The following are excerpts of definitions from some of the various bodies and organizations upon which the financial services industry relies when determining actions and responses in social media.
FFIEC Social Media Definition
Per the Federal Financial Institutions Examination Council (FFIEC) December 2013 final Guidance document “Social Media: Consumer Compliance Risk Management Guidance”, social media is defined as “a form of interactive online communication in which users can generate and share content through text, images, audio, and/or video”.
Included here are excerpts of that Guidance which refers to the FFIEC definition statement on social media:
Social media has been defined in a number of ways. For purposes of the Guidance, social media is a form of interactive online communication in which users can generate and share content through text, images, audio, and/or video. Social media can take many forms, including, but not limited to, micro-blogging sites (e.g., Facebook, Google Plus, MySpace, and Twitter); forums, blogs, customer review web sites and bulletin boards (e.g., Yelp); photo and video sites (e.g., Flickr and YouTube); sites that enable professional networking (e.g., LinkedIn); virtual worlds (e.g., Second Life); and social games (e.g., FarmVille and CityVille). Social media can be distinguished from other online media in that the communication tends to be more interactive. For purposes of this Guidance, messages sent via email or text message, standing alone, do not constitute social media, although such communications may be subject to a number of laws and regulations discussed in this Guidance. Social media is a dynamic and constantly evolving technology and thus any definition for this technology is meant to be illustrative and not exhaustive. In addition to the examples of social media mentioned above, other forms of social media may emerge in the future that financial institutions should also consider.
Financial institutions may use social media in a variety of ways, including marketing, providing incentives, facilitating applications for new accounts, inviting feedback from the public, and engaging with existing and potential customers, for example, by receiving and responding to complaints, or providing loan pricing. Since this form of customer interaction tends to be both informal and dynamic, and may occur in a less secure environment, it can present some unique challenges to financial institutions.
For purposes of this final Guidance, traditional emails and text messages, standing alone, are not social media. However, messages sent through social media channels are social media.
Additionally, the FFIEC Guidance states that one of the components of a risk management program should include a risk management process for selecting and managing third-party relationships in connection with social media.
The Securities and Exchange Commission (SEC) classifies social media in several different ways. The following excerpts are from the endnotes of the SEC Investment Management Guidance Update issued in March 2014, No 2014-04:
For purposes of this guidance, “publication” refers to any form of real-time broadcast through social media or the Internet whether by hyperlinking, posting, livestreaming, tweeting, or forwarding or any similar public dissemination and, does not relate to advertisements on non-Internet or non-social media sites, such as paper, television or radio. Social media allows for instantaneous updating of posted commentary and concurrent viewing of all of the comment history; in contrast, paper, television and radio are static media that reflect public commentary at a particular point in time and are limited media that would typically not reproduce all of the available public commentary simultaneously (often due to cost, space and other considerations).
As used herein, “independent social media sites” refers specifically to third-party social media sites that predominantly host user opinions, beliefs, findings or experiences about service providers, including investment advisory representatives or investment advisers (e.g., Angie’s List). An investment adviser’s or IAR’s own social media profile or account that is used for business purposes is not an “independent social media site.”