Volume: 4 Issue: 8
The Israeli Supervisor of Banks, Rony Hizkiyahu, sent a letter to banks and credit companies on 28 July, urging them to conduct risk assessments and establish clear policies for employee use of social networking sites (SNSs).
The Supervisor recommended that each policy detail which services and sites can be accessed, who can use such sites on behalf of the financial institutions, and how to use them.
'The use of social networks involves potential dangers to a bank and its customers, including operational, legal, regulatory and reputational risks', wrote Hizkiyahu. He highlighted the danger of individuals disseminating false or deceptive information, or impersonating the bank or its employees. He warned that websites often lack a sufficient level of security.
"This development shows the increased prevalence of corporate web 2.0 tools, which raises security concerns for large multinationals", said Omer Tene, Israeli Legal Consultant and Associate Professor at the College of Management School of Law. "It also shows collaboration between regulatory bodies. Data has become the key ingredient of the information economy, placing privacy and security on the agenda of securities, financial markets and competition regulators."
The use of social networking sites has grown significantly in the financial services industry, as it provides companies with the means to contact customers, provide information and services, and for handling complaints and banking transactions.