In the posts that proceeded this one, I looked at the governance, processes and systems of effective social media risk management. Now, I’ll wrap up by looking at the key enablers of an effective social media risk management approach for insurers.
Risk-aware culture: In spite of the importance of governance, processes and technologies, much of risk management is still dependent on people. Consequently, the best social media risk managers have a deep commitment to creating and infusing a risk-aware culture—an awareness of how the insurer is being exposed to social media risks and what each individual must do to help manage those risks.
In our view, the most important (and most difficult) aspect of social media control centers on cultural awareness and change. Setting proper expectations and engaging in culturally aware implementation can have a great impact on social media risk control.
Establish influential leaders in sponsorship positions to drive awareness and acceptance of the organization’s overall monitoring of social media use. Conduct training initiatives that use action learning principles, guiding employees at all levels toward behavior that is more likely to reduce overall risk.
Compliance: Many insurers find it challenging to manage and comply with multiple regulatory agencies, differing interpretations of regulations, and varying degrees of guidance on regulatory compliance. But another way to look at social media compliance is that it is simply an extension of the things insurers are already doing.
A compliance risk framework should include:
- Proper governance and oversight.
- Policies and procedures.
- Risk assessments.
- Risk monitoring.
- Metrics and reporting.
Performance management and measurement: Integrated risk performance management is essential if leadership at all levels is to have an end-to-end view of social media risks, their impacts, and their ability to be mitigated or controlled.
A framework for effective performance measurement in a social media risk management context includes:
- Identifying risks through data mining, trend analysis, systems and security.
- Reporting on risks.
- Managing risks.
- Measuring performance of risk mitigation.
- Identifying opportunities to improve control effectiveness, reduce exposure and automate processes.
Social media can offer a range of advantages to insurers, so our advice is to use it boldly to drive better customer relationships, foster innovation, and transform working patterns. Putting in place effective measurement and control capabilities, risk management procedures and a risk-aware culture does not inhibit insurers from pursuing such opportunities. Instead, it positions them to exploit social media to its full potential.
Download the full report: A Comprehensive Approach to Managing Social Media Risk and Compliance