It is mandatory that financial institutions develop relationships with consumers. However, it is of greater important that these institutions keep consumers’ information safe. Recently, the Federal Financial Institutions Examination Council (FFIEC) declared certain risks associated with the use of social media. They published a guide to social media platforms, which explains that the more platforms an institution is participating on, the more they need to access their risk.
The biggest concern the FFIEC has when it comes to financial institution’s online presence is privacy and criminals. Although all industries worry about this, financial institutions have greater responsibility due to the fact that they are dealing with consumers finances. They are at risk for things such as loan loss, physical theft, and identity theft. The FFIEC says, “Financial institutions should consider the use of social media monitoring tools and techniques to identify heightened risk, and respond appropriately.”
In the video below, Credit Suisse, a financial services holding company located in Switzerland, explains how they are limited on social media platforms because of security issues. Watch 2:41 to 3:25.
While the FFIEC recommends that the financial industry to take responsibility for these dangers, Fox Business recently published an article that advices consumers to take precautions themselves. They report that Ariel Sanchez of IOActive, a blog about online security, did a test with banking apps and found that 90% contained malicious links that could exploit a consumers banking information. While there are steps that financial institutions can take to make sure their apps are more secure, there is no way to make an app 100% safe. Sanchez gives basic tips on how consumers can be more active in keeping their banking information safe, such as password protecting your phone.
The FFIEC does not discourage financial institutions from using social media platforms, or deny that they can give them leverage if used properly and safely. In one section of their guide published, the FFIEC warns financial institutions that consumers will still talk about you on social media platforms even if you are not present.