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Long Overdue FCA Policy Renewal On The Table

Financial Sector May Finally Have Chance To Engage With Social Media

The Financial Conduct Authority (FCA) is expected to release new guidelines concerning financial sector marketing on social media next month, following pressure at the Social Media Leadership Forum (SMLF) held recently in London.

At the SMLF, London’s major financial players expressed their reluctance to invest in British social media marketing due to antiquated and unclear regulations which, if not adhered to, could result in a fine being administered to those firms who do fall foul of existing rules.

The last updates from the FCA on the regulations concerning marketing on social media were released in 2010 – just a few months after Twitter began hyperlinking hashtags and pre-dating the launch of both Google+ and Instagram. Ironically, the first item on the FCA’s list of what to consider when using social media states that ‘New media may move more quickly than traditional media channels, so regular reviews to ensure that information is up-to-date may be required.’ 

The penalties for not complying with FCA regulations can be hefty; last month Credit Swisse was fined almost £1.5 million for failing to ensure that a promotion was clear, fair, and not misleading. The sector’s reluctance to integrate social media more heavily into their marketing schematic is, therefore, understandable, considering the difficulty in operating on modern social media platforms while adhering to rules which were written at a time when MySpace was still the third most visited site by those under 18.

Considering David Cameron’s recent lauding of the virtues of the new digital economy, including a £50 million investment by the government in a new building on East London’s ‘Silicon Roundabout,’ it seems absurd that the industry which contributes 2.4% of Britain’s GDP and which has its global centre in London is restricted from fully representing itself on social media – a platform which has an annual growth rate of almost 75%.

While many key regulations are decided by Europe, for the UK to maintain itself as a centre of the new digital economy requires proper official oversight of the rules and regular attention paid to developments in the field. One of the many tangled aspects which led to the banking collapse of 2008 was lack of proper oversight and over-reliance on industry self-regulation. Social media’s growth rate is rapid, and a firm hand will be needed to avoid a repeat of the sort of bubble which crashed the tech industry in the 1990s. If Cameron is serious about his intentions to build a new ‘Tech City’ then his intentions will have to be backed by proper law and policy rather than attention-grabbing commercial development prospects, and updated FCA regulations are an easy first step towards achieving this.

Douglas is an English Literature graduate who has written about everything from music to food to theatre, now a content creator for Social Media Frontiers. No topic too large or too small. Follow him @DouglasAtSMF.

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Long Overdue FCA Policy Renewal On The Table Reviewed by Anonymous on Tuesday, July 29, 2014 Rating: 5
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