"Social Media Usage in the Financial Services Industry: Toward a Business-Driven Compliance Approach," Journal of Taxation and Regulation of Financial Institutions

Social media use by the financial services industry is prevalent and can be expected to grow as the social networks continue to expand and become further entrenched in the public’s online consciousness. However, the industry has lagged behind its corporate peers, likely due to regulatory concerns. In the authors’ view, however, regulatory concerns or uncertainty should not lead to paralysis, but instead should be considered in the context of the business purposes behind a financial services firm’s intended use of social media. Firms that have a clear business purpose in mind will not only be more effective in their online interactions, but will also have a better understanding of the risks involved. Steven Zaorski identifies four major purposes for which financial services firms might use social media, and explain the issues involved and potential pitfalls to be avoided in the Journal of Taxation and Regulation of Financial Institutions May/June issue .