Social Networks Upset Yet Another Group

Social-networking sites are a tad disruptive to our conventional way of existing, causing decision-makers in the enterprise, media, government, armed forces, and so on, to rethink the way they share information. Now financial regulators have jumped on board as the latest group to freak out over Facebook.

Reuters reported this week that Richard Ketchum, the chief executive of the Financial Industry Regulatory Authority (FINRA), said that social networks pose serious challenges to financial regulators as more Wall Street types are eager to use them. Among other things, using social networks to communicate with customers conflicts with regulators' requirements on keeping archives of employees' business communications.

According to Reuters, FINRA has now set up a task force "to explore how regulation can embrace technology advancements in ways that can improve the flow of information between firms and their customers without compromising investor protection."

My first instinct here is to snort and roll my eyes. I think our financial types have enough to focus on right now (e.g., making an effort to not cause the world to fall apart again) without concerning themselves with the benefits and drawbacks of Facebook. In the face of economic collapse, I just can't stress how unimportant it is for financial analysts and regulators to have the opportunity to comment on an investor's online vacation photos. Please.

But, moving on, the concerns expressed by FINRA are not unusual. It's no secret that our federal government (also lugging around bigger problems) is struggling with the need for paper trails and Section 508 compliance, which prevents them from harnessing the social Web.

Recently, we heard from the institution of journalism, when The Washington Post forbade its reporters from showing bias on their social networks.

The U.S. Army recognizes potential in social networks, as well as the potential for grave danger, and as such is monitoring all social-networking activity of its soldiers.

And, of course, social network use has been a huge issue for the enterprise as companies struggle with what information to share and with whom.

It's worth considering how important any of this is. The line of thinking is pretty easy to follow. Decision-makers are worried about the challenges of social networks but aware that they could also be beneficial. They're also aware these sites are here to stay.

But how important is it to the rest of us that the financial industry rework its rules on security and oversight to comply with the existence of social networking sites -- to organize a task force to figure this all out?

It's foolish to assume that if technology is ignored it will go away. But, on the other hand, should this be a real focus right now, particularly for Wall Street? Maybe it's just me, but it seems we should work on repairing the economy, keeping it stable, and then -- and only then -- start worrying about how best to harness the powers of Facebook.

— Nicole Ferraro, Site Editor, Internet Evolution