Ignoring social networks won’t work

As all types of businesses evolve on the social web one thing is true, everything has changed. IT is no longer in control, decisions are made on a department-by-department basis. In the world of financial services this can also mean individual advisors are making their own decisions, regardless of corporate policy.

So what keeps organizations up at night, in light of all these changes? According to 2010 Forrester research, data leakage and ensuring regulatory compliance in using these platforms are among the top concerns of organizations.

Data leakage is the biggest concern, with 82% of large organizations reporting themselves as “very concerned” or “concerned.” In the transparent social web, organizations – especially those with more than 5,000 employees, which is where this research is focused – have cause for concern. Regulatory compliance is another big concern – 66% of those surveyed said they were concerned or very concerned about maintaining compliance while enabling these social sites.

To address these fears, many large organizations restrict access to these and other “non-essential” programs, with almost 60% of enterprises reporting such restrictions. However, as we’ve talked about in the past, prohibition is not the answer.

Smarter companies are creating guidelines and implementing finer-grained controls on a feature-by-feature basis. This gives employees the opportunity to use key social networking capabilities while still giving the enterprise a degree of control. Up to 86% of enterprises have or plan to have such access in place which would allow advisors to, for example, establish a Twitter account or leverage LinkedIn to the fullest, all in a compliant fashion.

This aligns with our philosophy of enabling users to make the most of social networks for business, rather than blocking them. Innovative organizations seek to understand how social networks are used or can be used to build personal and professional networks, then analyze potential risks. The next step? Develop a policy that works by addressing regulatory issues, educating users on the policies, then enable them to use the social networks in appropriate ways. Over time, firms will review actual usage and results, policies will be updated and new ways to make the most of these networks will be discovered.

In short, while enterprises – including financial institutions – have cause for concern, ignoring the power of social networks isn’t the answer. There are many ways social networks will impact business – including creating new referral sources, helping advisors keep in touch with customers and recruiting new talent.

The companies that “get to yes” first will create a competitive advantage, establish themselves as innovators in the industry and enjoy the financial rewards this new communication channel has to offer.