Financial services companies have new guidelines to follow in social media.
The Financial Conduct Authority (FCA) has released its guidance on financial promotions in social media after “detailed engagement and consultation with the industry.”
Details of the FCA’s guidance were published in a press release last week.
There are some inherent difficulties for financial institutions when it comes to social—namely, conforming to best practices that dictate brevity, while adhering to the FCA’s insistence on clarity.
From the FCA press release:
Firms are reminded that any form of communication (including through social media) is capable of being a financial promotion if it includes an invitation or inducement to engage in financial activity. All communications (including financial promotions) must be fair, clear and not misleading. Promotions that fail to be ‘fair, clear and not misleading’ can pose a risk as they could lead consumers to buy the wrong product – ultimately with unhappy outcomes for them and for firms.
Clarity can be difficult when you only have 140 characters to promote something.
There’s also the problem of the “non-intended recipient.” If someone who is not supposed to see a message ends up seeing it because of a share on Facebook or retweet on Twitter, the piece of content must adhere to a certain standard of clarity. “One way of managing this risk is the use of software that enables advertisers to target particular groups very precisely,” the FCA suggests.
The FCA also suggests what it calls “image advertising,” which relies on heavy text within an image to get that clarity across. The problem here is that this all but eliminates promotion on Facebook, which limits text on an image to 20 percent of that image.
“Firms are reminded that it remains possible to advertise their presence in the market through ‘image advertising’ in a way that is less likely to present difficulties with character limits.”