Security and compliance issues slow businesses from embracing social media sites

Contributed by Roumiana Deltcheva (Thursday, June 03, 2010) | Category : eDiscovery

In March, Facebook passed Google as the most visited website on the internet. As a result of the site's rapidly increasing popularity, many businesses have begun incorporating it into their marketing or customer service strategy. However, employees in the past had been able to sidestep normal regulatory compliance by using it, relaying information that could otherwise be problematic. New compliance regulations have changed this avenue for enterprises now, Bank Investment Consultant reports.

The United States Financial Industry Regulatory Authority recently announced that all companies reporting to it must archive all posts and other correspondence on social media websites. This has disturbed a lot of enterprises, as most do not have an archiving system in place. Financial holding company Raymond James, for example, has told its advisors that until it develops a systematized method for doing such, it will steer clear of social media.

"Maybe half [of compliance officers] had a policy that advisors aren't allowed to use it," said Harry Chaffee, director of Renaissance Regulatory Services in Boca Raton, Florida. "None of the larger [bank] firms permitted it. Smaller firms with less than 30 advisors have a better chance because people know one another better."

Currently, eDiscovery technology revolving around social media is being developed to address this situation.