UK regulator the Financial Conduct Authority has issued a warning to banks over their use of social media to promote financial services.
It has launched a consultation which sets out rules on promotions through social media, seeking feedback from the finance sector on the ability to comply with existing communication rules when using sites such as Twitter and Facebook.
The FCA said that it has seen an increase in use of social media, but highlighted confusion among firms over the inclusion of regulatory information such as risk warnings when communicating through messages of restricted length. For example, Twitter allows only 140 characters, while Vine is limited to six-second video loops.
The FCA provides a number of recommendations for acceptable promotions, for example that more complex financial products should not be promoted through social media channels, or that companies use embedded infographics to include relevant information. It states that it does not wish to block social media use, but requires firms to adhere to existing guidelines.
“The FCA sees positive benefits from using social media but there has to be an element of compliance,” said Clive Adamson, director of supervision at the FCA.
“Primarily, what firms do on social media must ensure customers are at the heart of their business.
“Our overall approach is that financial promotions, whether on social media or traditional media, should be fair, clear and not misleading.”
The consultation will close on 6th November.
While banks in the UK have been slow to engage with customers through social media in the past, it has become more commonplace for most organisations. Earlier this year, for example, Nationwide announced the launch of a 24/7 Twitter service to meet customer demand.