Social media offers considerable advantages to financial institutions, but establishing and maintaining a social media presence can also expose companies to a broad array of risks. Unfortunately, many companies don’t seem to take those risks seriously and tend to be inadequately prepared for the challenges brought by social media.
Companies typically encounter a number of organizational weaknesses as they begin to analyze their vulnerabilities to social media risks. In order to reduce risk associated with social media, companies need to pay special attention to the systems that control the use of and access to data, as well as to organizational governance and processes for identifying, assessing and managing risk.
With effective measurement and control capabilities, risk management procedures and a risk-aware culture, companies should be positioned to exploit future opportunities to leverage social media as a customer channel. While some fear that a performance management and measurement capability might stifle innovation, a proper performance management approach framework can actually enable people and the entire organization to pursue new approaches with adequate protections in place.
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Blurring the boundaries between business and personal lives – yes, those photos of you having too much fun – can be far more than just embarrassing. Employers’ reputations can be harmed too if your behaviour runs counter to high-profile corporate campaigns and messaging. And Facebook posts about interesting work or travel could mean a good corporate spy is able to piece together information to work out business relationships with outside companies and their R&D pipeline.
Salespeople who establish LinkedIn relationships with customers don’t intend to disclose confidential customer lists, but are doing so unless they are careful about revealing their contacts. Employees need to vet contacts with care and understand how much information they are sharing. Corporate spies have even worked out when divisions are in trouble because people are touting for work on LinkedIn.
The urge to share new nuggets of information instantly can be overwhelming but information shared too freely can be stitched together by interested outsiders. Spies working for a security consultancy were able to predict that a company would file for bankruptcy based on employee Tweets about budget cuts. And there’s also just plain fraud: stock markets crashed after a hacker fraudulently used the Associated Press’s Twitter account to post fake news of a White House bombing.
We all know about the obvious risk of communicating sensitive information over email, but emails today are sent with an ever-increasing number of weblinks and embedded malware. It has become distressingly easy for hackers and spies to install rogue software on computers when people inadvertently click on bad links, not just via Facebook but also in your own inbox.