Many Canadian financial services institutions already use software to monitor what their financial advisors and other employees are doing on the World Wide Web. Now, several major banks are testing technology that tracks the activities of employees on online social networking sites such as Facebook, Twitter and LinkedIn.

“The vast majority of Canadian financial institutions that have been our customers for years in the instant-messaging space are now conducting pilots as to how they conduct social networking in a compliant fashion,” says Sarah Carter, vice president of marketing at Belmont, Calif.-based FaceTime Communications Inc., which sells the new watchdog technology.

Although it costs more to use specialized software to track activity on social media websites, it’s a necessary expense in today’s environment, says Anthony Prenol, a partner in Blake Cassels & Graydon LLP’s Toronto office. “Every day, there are thousands of new blogs created. Companies in any industry are faced with tracking content, whether it’s content posted by their employees or other people.”

Monitoring software can fill in the gaps for a firm’s manual resources. “If you have an employee sitting at a computer, and once a week he or she types your company name into a search engine [to check online comments], you aren’t going to get that level of analysis or protection that [monitoring] software can give you.”

Acting as a gateway between a firm’s employee and a social media website, social media monitoring software is able to monitor, block and modify content that an advi-sor attempts to post to his or her profile on any major social media website. The only requirement is that an advisor must be using the firm’s computer — either a desktop or laptop used remotely. The software does not currently monitor correspondence via mobile devices such as smartphones.

Financial services firms generally ban advisors from using social media because the firms cannot track or monitor the communications advisors have with clients through these sites. However, social media monitoring software proposes a solution to that roadblock.

So far, the banks remain tight-lipped on the issue of monitoring advisors on social networking sites. In an email response to a request for information about Toronto-Dominion Bank’s connection with FaceTime, Barbara Timmins, a corporate communications officer with the bank, replied: “We do not discuss ven-dor relationships. So, unfortunately, I cannot comment either way. Of course, social media is a compelling new channel of communication, and we are exploring both external and internal strategies.”

Bank of Montreal uses some of FaceTime’s services to monitor employee Internet usage, but has no immediate plans to start actively monitoring social media, says BMO spokesman Ralph Marranca: “We are just talking to FaceTime to get a sense of what capabilities are out there and to keep abreast of developments in the industry.”

Although monitoring the use of social media by employees may have a Big Brother aura, there’s an upside for advisors who want to embrace these blockbuster websites. Those advisors who currently face restrictions on using social media for business may be given more freedom to do so. That’s because there’s far less likelihood of running into compliance problems when all communications with clients are a matter of record.
@page_break@So far, several banks have been using FaceTime’s Unified Security Gateway software, a tool that allows firms to monitor and record employees’ instant messaging. USG also monitors email, blocks access to certain websites and protects against viruses that can be contracted from the web. Social media monitoring is an added feature of the USG system.

Carter says banks are experimenting with FaceTime’s social media monitoring features to see if they can use the software with thousands of employees: “[Bank] IT teams are working with compliance to pilot the product within certain pockets of the organization.”

Although some financial services firms forbid advisors from using social media, they may be surprised to learn that many advisors are using it anyway. A survey by Austin, Tex.-based Socialware Inc. this past May into the social media practices of 200 U.S. advisors found that about 60% of the respondents use the medium for business purposes and 40% use social media sites for business in direct violation of their firm’s policy.

Of that 40%, almost half found they had been able to reach out to new prospects, and almost a third had acquired new clients.

With social media sites producing this type of value, firms that try to fight their use will be hard-pressed to do so, says Chad Bockius, CEO of Socialware: “Every firm out there is going to have to find a way to adopt social media — just like they did with the Internet, just like they did for instant messaging and just like they did with email.”

Most companies looking to integrate social media monitoring software, such as FaceTime’s software, to their existing IT infrastructure, often want to expand their “acceptable use” policy of the Internet to all of their employees. Currently, FaceTime charges about $100 per user per month for its “on premise” software, which is integrated into the client company’s internal network.

The difference between using Facebook normally and with the FaceTime’s gateway is a toolbar that appears at the top of the computer window. “When we add the toolbar to the top of the screen,” says Carter, “it’s very obvious that all the content is being moderated. It reminds the [employee] of [his or her] ‘acceptable use’ guidelines.”

FaceTime software also disables certain functions on social media sites, such as Facebook chat or Farmville or Mafia Wars (online games that people can play when on Facebook). These games add no value for building connections.

There is also a “Lexicon Library” in FaceTime’s software, which stores certain words, such as “buy” or “sell.” This means that, when a user posts a status update or message on one of the Big Three social media sites, the software will run the message through the lexicon library and either approve or reject it, depending on the guidelines cited by the client firm.

IE