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Bits Social Media Risks and Mitigation Paper June 2011

Bits Social Media Risks and Mitigation Paper June 2011

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Published by: Josh Shpayher on Jul 19, 2011
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10/21/2012

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S
OCIAL
M
EDIA 
ISKS AND
M
ITIGATION
 
 June 2011
BITS A DIVISION OF THE FINANCIAL SERVICES ROUNDTABLE1001 PENNSYLVANIA AVENUE NW SUITE 500 SOUTH WASHINGTON, DC 20004202-289-4322 WWW.BITS.ORG
 
BITS Social Media Risks and Mitigation 
© BITS/The Financial Services Roundtable 2011. All Rights Reserved.
2
 TABLE OF CONTENTSE
S
............................................................................................................ 3I
...................................................................................................................... 4S
M
,
S
M
 ................... 5
 
I.C
 .................................................................................................................. 5
 A.
 
Foreign and Domestic Privacy Laws .......................................................................................... 5B.
 
Managing Compliance with Other Company Policies ............................................................. 7C.
 
Information Retention Management .......................................................................................... 8D.
 
Endorsement Guidelines ............................................................................................................10E.
 
Labor Relations ............................................................................................................................10F.
 
Payment Card Industry Risk  .....................................................................................................13G.
 
Marketing Laws and Regulations...............................................................................................14H.
 
FINRA Requirements .................................................................................................................15
II.L
 ........................................................................................................................... 20
 A.
 
Lack of Separation of Personal and Professional Communication......................................20B.
 
Civil Litigation.............................................................................................................................21C.
 
eDiscovery  ....................................................................................................................................22
III.O
 .............................................................................................................. 25
 A.
 
Identity Theft................................................................................................................................25B.
 
Spreading Malware.......................................................................................................................27C.
 
Social Engineering  .......................................................................................................................28D.Disclosure of Intellectual Property or Other Sensitive Information ...................................31 E.Products Lack Maturity ...............................................................................................................34 F.Managing Access.........................................................................................................................36 G.Measuring Success .......................................................................................................................37 H.Lack of Centralized Governance...............................................................................................40 I.Physical Security Risk  .................................................................................................................41  J.Social Media Content Is Forever ..............................................................................................43 K.Lack of Associate Productivity  ..................................................................................................45
IV.
 ................................................................................................................ 47
 A.
 
Reputational Threat.....................................................................................................................47B.
 
Lack of Monitoring ......................................................................................................................48C.
 
Insufficient Employee Training ................................................................................................50D.
 
Negative Brand Impacts .............................................................................................................51E.
 
Responding to a Crisis ................................................................................................................53
Glossary  .....................................................................................................................58 Appendix B
Building an Internal Social Media Team................................................................61 Appendix C
Banking Regulatory & Legal Overview  .................................................................64 Appendix D
Other Applicable Laws and Regulations ..............................................................66 Appendix E
Social Media Risk Matrix ........................................................................................67
............................................................................................................71
 
 
BITS Social Media Risks and Mitigation 
© BITS/The Financial Services Roundtable 2011. All Rights Reserved.
3
EXECUTIVE SUMMARY 
Social media is a term used to define the relatively recent phenomenon of mass personal publishing most often intended for public consumption and typically conducted in an interactive and
conversational style. Social media‘s rapid growth – 
it is now the most popular online activity 
 – 
hasgarnered the attention of the commercial space, including financial institutions hoping to meet their
customers‘ evolving needs and expectations through this medium.
Recognizing the rapid adoption of social media exemplified by now familiar sites Facebook, Twitter,and LinkedIn, BITS has developed this paper to provide financial services companies with insightinto the various risks associated with the deployment and use of social media. This paper does notintend to cover every situation an organization might encounter, but instead serves to highlight theissues common to many financial institutions and provide guidance on how these risks might bemoderated. This paper is intended for a general audience, from business practitioners to compliance, risk andlegal professionals, primarily from a United States perspective. It provides a synopsis of the majorthemes an FI should consider when using and deploying social media and is best used as a referenceguide, delving into the situation or organizational section that is most appropriate to the reader. Toassist readers in identifying which sections are most applicable to their purpose and expertise, a risk matrix is provided in  Appendix E.   This paper addresses risks and mitigation methods for financial institutions using social media fromthree perspectives: To communicate with or service customers,By employees within a financial institution in personal and professional capacities, andBy employees or contractors outside the office.DISCLAIMER: This document was not created to provide legal advice and all information should
be used in consultation with an organization‘s compliance and legal departments.

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