Let us be brutally honest; the FCA dropped a ball. In the time it has taken to update its social media guidelines, Instagram, Vine, Snapchat, and a whole host of other social networks have been born.
Coupling this, there has been, unsurprisingly, a dramatic growth in social media users. In fact, the number of social media users has almost doubled to 1.82bn since the regulator first published its social media guidance in June 2010.
If we look at Twitter alone, it now has around 255m users and Instagram has more than 100m active users.
All around us the digital economy is booming. Internet traffic is doubling every two to three years, and mobile traffic every single year.
By 2015, McKinsey Global Institute predicts there will be 25bn wireless connected devices globally, doubling to 50bn in 2020, and social technologies could be thought of as an economy in their own right.
In four industries alone (consumer packaged goods, consumer financial services, professional services, and advanced manufacturing), McKinsey predicts there is as much as $1.3trn (£774bn) of untapped value that can be unlocked by social technologies.
It is a shame, then, that while all this has been happening, the financial services industry has been watching from the sidelines.
A near four-year wait for updated social media guidance from the regulator has prevented many professional advisers and regulated firms from taking advantage of the opportunity social media presents.
But we are where we are, and the question is whether the industry can play catch-up and begin to reap the benefits of being digitally active now the FCA’s social media consultation guidance has been published.
If we look at what firms and marketing professionals wanted from the guidance, it was simple. Clarity on what is and is not compliant and more freedom to turn social media into a commercial opportunity.
So have they got it? To give credit where credit is due, the FCA has tried to be more prescriptive in its guidance, and give clear examples of compliant and non-compliant social media posts.
It also appears they are listening (at least a little) to the firms they regulate. At a recent panel held by the Social Media Leadership Forum (SMLF) and attended by the FCA’s Richard Lawes, myself and the FT’s management editor, Andrew Hill, I got the distinct impression the regulator had no plans to include examples of compliant and non-compliant posts in the guidance. That was until the attendees cried loudly for grey areas to be explained, and voilà, we have examples in the guidance.
But one of my issues with the examples is they do not demonstrate what the FCA has itself said is possible, which is that creativity and compliance are not mutually exclusive.
Speaking at the SMLF panel, the FCA’s Mr Lawes said he understood it was difficult to stay within the boundaries of regulation while also being creative, but stressed that it was possible to be ‘creative and compliant’.
But if we look at the FCA’s own examples it appears it is also struggling with the confines of its own regulation.
A tweet example by the regulator cites the following copy as being compliant: “#ad Spread betting + CFDs: Trade GBP/USD with us. Your capital is @risk & losses can exceed your deposits.”
The FCA says this tweet is fair, clear and not misleading, but I beg to differ. To a layman or someone who saw this retweeted, this would not be clear at all.
In pursuit of protecting the customer, the regulator has gone too far in attaching unrealistic compliance restrictions on social media, while completely ignoring social media best practice. And best social media practice the above tweet is not. Social media is about engagement and conversation, and the FCA needs to bring this into balance.
The consultation for the social media guidelines closes on 6 November and I urge you to pass this challenge back to the regulator when you submit your views.
Sharon Flaherty is founder of boutique social media and content marketing consultancy, BrandContent
