Banks urged to manage social media exposure

The Bangko Sentral ng Pilipinas (BSP) has directed banks and financial institutions to manage social media risks as the Philippines is currently one of the world’s fastest growing nations in terms of social media usage.

The BSP’s Monetary Board has approved the issuance of pioneering guidelines on social media risk management that advocate responsible use of social media by BSP Supervised Financial Institutions (BSFIs) to foster a balanced and coherent approach to innovation.

Social media app including Facebook, Twitter, Instagram, among others present vast potential benefits and opportunities for greater economic advancement and financial inclusion.

The guidelines ensure the necessary safeguards, governance structure, and standards are in place to effectively manage the associated risks according to the BSP.

A report titled “Digital in 2016” of We Are Social showed there are over 48 million active social media accounts in the Philippines, accounting for 47 percent of the entire Filipino population.

“The issuance is timely and suitable considering that the Philippines is currently one of the world’s fastest growing nations in terms of social media usage and level of engagement across various social media platforms,” the BSP said.

The BSP noted BSFIs have been aggressively leveraging on social media platforms for marketing; offering of innovative financial products and services; and engaging their customers and stakeholders.

“At the back of this evolving and increasingly dynamic operating environment, the new regulation underscores the importance of having a well-defined social media risk management strategy aligned with BSFIs’ strategic business goals/plans,” it said.

Depending on the extent and degree of social media usage, financial institutions are required to adopt commensurate risk management mechanisms and governance structure to effectively identify, measure, manage and monitor risks arising from social media platforms.