Your Bank's Facebook Profile - Benefits and Risks

2/3/2011

Facebook has quickly become the most popular social networking site in the world. With over 500 million users and 50% of active users logging in every day, Facebook can be a popular advertising outlet for a company. Businesses in every industry are joining Facebook with hopes of increasing awareness to their brand. In particular, banks, credit unions, and other financial institutions are creating Facebook profiles. Many similar institutions now wonder if they should join the trend and have a Facebook company profile.

In short, a lot of good can come from a Facebook profile for your bank. A Facebook profile can serve as a gathering place for current customers, potential customers, existing employees, and future employees. This could also be a venue to advertise new products, provide weekly discounts, and promote existing bank services. In addition, a bank could use this outlet to broadcast volunteer positions and community projects. Joining Facebook does not have to be only about increasing revenue. Facebook can help market a bank’s community involvement – a key activity of any independent bank. A bank that has a profile on Facebook displays its intent to use new technology and stay on the cutting edge for its customers.

Sadly, bad situations can result from good intentions. A few IT security threats will be presented from having a Facebook profile. With the open forum of Facebook, a user could spam the page with negative feedback. To help remediate this, a representative from the bank should be appointed to monitor the forum on a daily basis. The ugliest scenario is that a social engineering scheme could be used against the bank. A hacker could gather information from employee Facebook user profiles and then phone or email employees to get passwords. This is a popular tactic that can be leveraged, if the opportunity presents itself.

Also, profiles containing text and images are out in “the cloud” and the data is stored on servers throughout the globe. Just like any situation involving the storage of sensitive information, a data breach can have devastating consequences. With a Facebook profile, a bank must trust that Facebook is taking proper security measures.

So why should a bank join Facebook? Some banks are deciding to join, but not all financial entities are jumping on the bandwagon. The goal of a Facebook profile is to leverage the exchange of information in an open environment. Customers want to feel as if they are part of something, and currently there is no better or quicker way than through social networking. The added value that Facebook provides depends on how far your bank is willing to go. The bank must weigh the costs and benefits associated with have a presence on Facebook, and determine that the benefits outweigh the risks. So during your next IT examination, ask your auditor about performing a social engineering assessment using Facebook data.

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