Recognizing the power of social media, the Bangko Sentral ng Pilipinas (BSP) has released new guidelines on social media which local banks must observe to avoid or mitigate various types of risks.
The guidelines are contained in Circular No. 949 issued on Wednesday, March 15, by the Monetary Board, the BSP’s policy-making body.
The BSP said social media presents vast potential benefits and opportunities for greater economic advancement and financial inclusion.
“The guidelines ensure that the necessary safeguards, governance structure, and standards are in place to effectively manage the associated risks,” the monetary agency said.
It noted that the issuance is timely and suitable considering that the Philippines, with over 48 million active social media accounts or 47% of the entire population, 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.
Likewise, the BSP observed that banks 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 strategic business goals/plans of BSP Supervised Financial Institutions (BSFIs),” it said.
Depending on the extent and degree of social media usage, the circular requires banks to adopt commensurate risk management mechanisms and governance structure to effectively identify, measure, manage and monitor risks arising from social media platforms.
“Aside from ensuring that the pertinent legal, reputational, strategic, operational, and compliance risks are addressed, the new guidelines highlight added dimensions to these traditional risks which BSFIs need to consider in designing their social media risk management program,” the agency said.
These risks, the BSP said, include the growing threats on information security and fraud such as account takeover, malware attacks, and phishing and spoofing schemes, among others.
“A BSFI’s social media risk management program should, at a minimum, be able to address potential reputational risks as well as provide guidance on acceptable use of social media by employees, whether for official or personal purposes,” it added.
In formulating and implementing their social media policies, the BSP said local banks should also see to it that existing rules and regulations on financial consumer protection, cyber-security, outsourcing and anti-money laundering, among others, are complied with.