LinkedIn: The Social Media “Gateway Drug” for Financial Firms Gets “Legalized”

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It’s no secret that LinkedIn has been the social media “gateway drug” for financial industry firms. For an industry that has long conducted business via referral and on the basis of who you know, the utility of LinkedIn makes the network the natural first step into social media for financial professionals and companies.

Now, those who had resisted embracing LinkedIn due to compliance concerns can fear no more. On Thursday, LinkedIn announced that it created a platform of six certified compliance partners in a big step to invite more firms to conduct business inside its digital domain. The move ranks as the most compliance-friendly solution to date – akin to “legalizing” financial dialogue on LinkedIn.

LinkedIn, for some, is an extension of their professional referral network. A study to be released by Smarsh in May 2014 found that LinkedIn is the digital channel most requested by employees at financial firms. The newly announced compliance partnership uses six different providers, including Smarsh. In a press release, Smarsh indicates that users of their solution “can now capture content through a direct connection with LinkedIn application programming interfaces (APIs). The APIs enable customers to search and supervise their organization’s LinkedIn activity, including company pages, profiles, posts and groups.”LinkedInInfoG

Problem solved? Not exactly.

The reality is that for most firms the struggle with social media isn’t compliance but rather is how to most effectively use the platforms. Providing simpler, more easily accessible compliance solutions for LinkedIn is a step in the right direction, but it begs the following questions:

What content do you share? How do you direct that content to targeted audiences versus vast dissemination? Can LinkedIn be used for relationships with brands as much as it can for people working for those brands? These questions still need to be addressed.

The discussion on content is best reserved for other posts, like this one. However, no single innovation in compliance software can save you from the biggest and most often overlooked foibles of ramping up the financial industry’s favorite social network. Here are three missteps to avoid:

1)      Forgetting to upload your picture, or worse yet – posting a bad one. Put a face on your profile.  Invest the time in posting a professional, polished photo of yourself. Why spend a lot of time and money on compliance and a brand, and overlook the importance of projecting a professional image?

2)      Making impersonal introductions. Nearly every day, I get generic contact requests from people I know and many that I don’t know. If a contact is valuable to you, let them know why you are reaching out. Just the same, demand that of others. Get a generic request? Ask them why they are interested in connecting before accepting. You’ll have a higher quality network as a result.

3)      Failing to listen. LinkedIn has useful tools to show you how many times your status posts were read or shared. It also can tell you who visits your profile and what trending topics there might be within your personal network. These are all signals for you for potential follow up. LinkedIn is not a soapbox rather to work effectively it needs to be a two-way engagement. That requires you to listen, comment and respond as part of a dialogue and not a one-way monologue.

While this new partnership is more evidence that financial services companies are awaking to the power of social media (and provides a new compliance option for staying legal), it still doesn’t address the daily engagement opportunities LinkedIn provides for anyone interested in building and commanding a social media channel to connect and market to wider audiences. That can only be accomplished by understanding the rules of engagement and acting upon them to extend your referral network in the new digital domain.