Episode 9: Forecast 2016 - Legal Tech and Social Media Issues for Community Bankers

Hello everybody, this is Eric Cook and I am with WSI Digital Marketing. I am very excited to welcome you to episode 9 of my banker education series webinar shows. Today is December 15th, 2015, and today we're going to be talking about legal technology and social media issues for community bankers with my good friend, Deborah Gonzalez. Before we get started, I just want to remind you, if you, uh, maybe responded to an email or are on the distribution list for this, great, you probably know this already. But if you discovered this webinar as a result of social media or maybe a post that Deborah shared and it took you directly to the GoToWebinar registration page, if you're interested in joining me for future Banker Education Series webinars, You can visit poweredbywsi.com/BES for Banker Education Series. That's a shortcut that will take you directly to this page, and when you get here, you can click on this little link to sign up for email reminders. That'll get you on the list and make sure that future episodes will be delivered to your inbox. Also, just as a reminder, we do have 8 prior episodes that are out there for you to take a look at. And you can visit all of those and their recordings by just scrolling down the page and clicking on the green button to— that'll go ahead and it will take you directly to the YouTube page where we have all of those webinars archived for your viewing pleasure. So with that perfunctory out of the way, one other little reminder. If you have dialed into the audio component on a telephone and during the introductory message you heard somebody speaking in French, you may have dialed the Canadian number. WSI has headquarters in Canada, so when we do webinars, sometimes the Canadian number gets slipped in there as the default. If you do not have a long-distance calling plan at your institution, If you're dialing up the United States version of the number, you can go into your audio settings in your control panel and click on the additional numbers, and that will give you the US-based number that you can go ahead and dial, and that will get you a domestic call. So just to see, there's a few people that are dialed in on the phone, several that are using voice over IP on their audio on their computer, but would hate to see anybody surprised with a 60-minute phone call to Canada. If it can be avoided. And as I alluded to with all the other episodes, this episode is being recorded, and you will be able to get access to it here at the BES page. And if you want to do a replay, share it with others in your organization, whatever the case may be, certainly encourage you to come back here and check it out. Without further ado, now what I'm going to do is I'm going to go ahead and Fire up the webinar and get the slides going. Let's make sure I get the right screen being presented here. And let's see here. So whilst I'm doing this, Deborah, I would like to formally welcome you to the Banker Show, and thanks for being my guest today. Thank you.

Well, thank you. I'm excited to be here and to share some ideas as we look forward to 2016. The issues that have even started in 2015 are really going to impact us as we move forward in this new year.

Right.

And so I always like to start, and you can click to the next screen.

I'm just confirming that we've got the right screen share here. So I've got a couple of screens that are showing up. So I wanna make sure that just the slides are showing and not the slide and the preview of the next slide. So, Deborah, can you either confirm which view you're looking at or if I need to make—

Yeah. The view I see is the slide and one that comes after it.

So let me go ahead.

Just a little bit about myself while Eric fixes that up. So as Eric said, my name is Deborah Gonzalez, Esquire. I am an attorney, and I also founded a— and basically what we do is really focus on the legal and compliance and security issues for our clients who are working with social media or doing online activity, and trying to make sure that their activities online are legally okay and sound, that they're in compliance with the regulated industries, and that they're also effective for what they want to use. I am the co-founder of Digital RCP, which is Digital Risk and Compliance. Compliance Partners, along with Eric Cook. And we're going to talk a little bit about some of the things that we offer in terms of prevention and protection in this area. I'm the author of 2 books. One is called Managing Online Risk: Apps, Mobile Security. It was published last year by Elsevier. And the second book is Online Security for Business Travelers. And that is also available from Elsevier. So if you do a lot of business travel and you're concerned about protecting the data that you're taking and other— as we're doing so much online with our travel, that's a good little book for you to reach out to. Our website is www.law2sn.com. We also have a Facebook page, facebook.com/Law2SM. Please show us a little love and like and follow and the rest of the stuff. And then what happens is that we then post and distribute information that we think is relevant to what's happening in social media and online activity. As always, Let me say this is for educational purposes only and does not constitute legal advice. Everybody has particular issues or circumstances, and so you do want to check with your particular legal advisor in there. Eric, are we set yet?

I think we are. Are you seeing your lovely picture on the introduction slide by chance?

No, I'm not. I'm still seeing the first slide. And now I'm seeing the go-to screen. Okay, there we go. So that's my picture.

There we go.

If you wanted to put a face to the name. And that's the COVID of one of the books, just so that you have that there. Great. Next.

We'll go ahead and just pull back and make sure that this is formally part of the presentation since you mentioned it.

Yes.

I want to make sure that it shows there. And then also, as I'm kind of going through my mental checklist of things to mention during the introduction, I forgot to mention that if you are attending this session live and have a question or a comment and you'd like to toss that into the chat function there, feel free to do that, and I'll keep an eye on it. And we'll have a couple of breaks during today's session We'll go ahead and ask your question. And I'm sure Deborah would appreciate any sort of engagement from the audience. So feel free to send a chat in and let us know what you think.

OK. So I really like this quote. I actually used it in my book as I look at the future of security and online. But the idea is, whenever you're talking about the future, it's always easier to forecast when you're actually looking back. And this is Greg Sattell in an article in Forbes in 2014, and he writes, and I quote, the future isn't what we thought it would be. We don't walk around in silver suits, travel to colonies on Mars, or drive in flying cars. Instead, we dress casual, take selfies, and communicate in 140 characters, unquote. And I just think that that's such a great thing to keep in mind as we're looking at the future, that sometimes it can be much more fabulous than we ever imagined. But sometimes it's really a slow thing, and that means that the future comes and we almost don't realize that it's here. So next slide. Here's a couple of other quotes that I found regarding to the future. Eric, can you click to the next one?

Yep.

I just thought that we should keep in mind as we look forward, right, it's often said that there are 2 types of forecasts, lucky or Prediction is very difficult, especially if it's about the future. Always in motion from Yoda, and all of you Star Wars fans out there waiting for this weekend. To come up. Winston Churchill, but it's also difficult, you can actually forecast things that in 2016 and the year ahead, but it's also about how much we're aware of what we actually do with those trends within our own business, within our own bank, within our own community. So, you know, it's not Just that the future will happen. A lot of creating in terms of those trends in our own banks mind at relatively about ten issues about what me. Happen in the future, in 2016, or what we need to be aware of as we look at 2016. Customer that are demanding that we use it in order to communicate with them. So it's really hard to just say, you know, we're not going to use it at all. Now, that does not mean that we use every single social media platform that is out there. It means that we need to be strict with the media that we're using, because each of these social media platforms are evolving. So one example is the mobility feature of them. We're seeing social media platforms that have a mobile app, but then have separated certain functionalities that they've had on the website, and sort of created separate apps when it comes to mobile. And Facebook and its Messenger app comes to mind with that. It's not just the functions that they're sort of streamlining in their apps, but the algorithms that make the social media so targeted to certain individuals is also evolving. And I know that Eric can talk a lot about that in terms of how Facebook, you know, if you have something put out and you're a business, it's not going to go as far as if you were an individual who is putting out that more than ever the idea of advocates for your brand, for your bank, are important in that way. The other side I've seen online, which is a— but we're facing sort of this dilemma in the online world of, you know, are there any boundaries? Are there any rules as to what you can actually say online that may be completely legal? Is conveyed in a way that's sort of quite rude, quite nasty, as I put here, uncivil. And we're seeing right now a backlash against certain types of posts. People are, you know, very sensitive about certain messages that may come across as offensive. That makes absolutely no sense. And the example I'll bring you, which is a holiday example, is the Starbucks red cup. They have a holiday design that comes in December, and this year they decided that they were just going to put any decorations And there was some uproar on social media. And because there is some— the polar bear, it's a white polar bear, white icing, and then it has some red icing, like a red scarf. People were claiming that it looked like its neck had been slit. Split and that was dripping blood. So sometimes even though you have the best intentions of what you put on, we cannot always control the sensitivity of people who, and the public who are going to view this, because it's more than just our customers and our clients. And so more and more we have to be aware of these sensitivities out there and be prepared. And that's the other part to take away from what's happening in social media in 2016 is that we have to be prepared for when things come across, that came across the wrong way, how do we correct that mistaken perception that people had, or, you know, even correct something that maybe a troll, somebody who intentionally went after our bank to do. Next. Next slide.

Yep, it's loading. Vanna must be a little bit slow today. But it's there now. We're seeing the Apple Watches, so we're good.

Yep, that's what we're seeing. And this is issue number 2, our wearables. And I started with how small is small, because one of the problems that we're faced with these wearables— I mean, people have been using some kind of wearables. Eric, I know, has the Fitbit, and I know many of my colleagues who have those kind of bracelets that will monitor, right, how long you've been offline, different things like this. But now with the smartphones coming into this area, what we're seeing is that there's a lot more that these devices can do, a lot more data that they can capture, which means that there's a lot more data that could be stolen. In a way. And one of the issues that has come up repeatedly with these wearables is, you know, when it comes and you have employees who come to work and they have these wearables on, do we know that they even have them? Do we know that they're wearing it? You see here I ask the questions. It could not just be customers. It could be vendors, third-party vendors who come in. Maybe they have it. Do we know if they're recording? Do we know what they're going to do with that data? Wearables within our policies, some of the banks already have BYOD policies, bring your own devices, but do we have any BYOW, bring your own wearables devices where we're sort of saying, you know, we have duties of confidentiality, we have duties of disclosures, are we making sure that employees understand that a picture they take with their watch and post on Facebook may in fact be a violation in compliance in some of these things. And so a lot that we're seeing right now, those who have these wearables, you know, it's a novelty. Not everybody's going to have it because they're also on the expensive side. But we will get to a point next year where these will be like a commodity. Prices will come down. There will be streamlined versions of them. And so as the price comes down, there'll be more mass adoption of these kind of wearables. And I'm looking at the smart watch right now, but actually I got a catalog and it had a necklace that had sort of like this sensor on it that connects to your tablet or your watch or whatever. So, you know, it's being put in all different kinds of jewelry, so don't just think it's the watch. So You know, when we think of 007 and his pens, right, that Q gave him, we're seeing that now in many different types of these devices. Lapel pins, for example, was another one that I saw. T-shirts that, believe it or not, can then monitor and censor your heart rate, your sweat levels, things of that nature. So, you know, what if it's in a tie that somebody may have or a woman's scarves. So I think this is something that we're going to be looking at in 2016, is that this technology can become hidden in a way so pervasive that it can also be hidden in plain sight, and things that we have to be aware of, and more importantly, educate our employees about what can happen with some of these as we're trying to protect the privacy. confidentiality and therefore to protect our reputation. So this is something that we're just going to see growing in 2016. Next. So the next issue is data. And you have probably heard about this anywhere from big data to, you know, it's usually the term that they use, big data. We've always had data. In our businesses. Data is not something new. What is new, though, is the awareness of the public of how much data is being collected, and then why is it being collected, and whether they actually consented to that information being collected. And you see here, I have some bullet points of when we look at data, we're looking at When we collect it, how it's being stored, and for a lot of us, you know, we're going to be talking about the cloud in a minute, of storing it in the cloud so that we don't have to pay for a full room of servers like it used to be. Who has access to it? How do we protect the data from being— All of us have heard of all of this, right? That have been making headlines, how many millions of records every year get stolen. How do we use the data? The importance of, okay, it's one thing if you collect it, but then I want to know how you use it and if you're using it or if you are in fact sharing it with third-party affiliates or people that I may never know of. And so for example, on Facebook, in their terms of use, one of the things they will say is that any content that you upload to your Facebook account, Facebook a worldwide license to use that content, whatever content it is, including not just whether they're— so, you know, we have to be careful that when We're putting all of this— that we're actually putting it in control. And so one of the things we usually suggest to clients is that think of your social media as a way to drive people to your website, and then your website is where you control everything, especially if you're collecting your data. And you have to make sure you have policies in place and that your employees understand the importance of the data, the importance of the confidentiality of that data, but also about the accuracy of the data. It's pretty surprising, sometimes you'll get something in the mail and you know it's bulk mail and the name that they have it is wrong, just completely wrong and very strange. And you know, some days to begin with, And so we track what we're doing with this data, how we're using it. And then in some ways, we also have to think of the ages of our clients or customers of when we're collecting this data from them. So if any of our banks have a children's account, for example, one of the things that you have to be conscious of is the COPPA, the Children's Online Privacy Protection Act, and make sure that you have certain notices on your website to let parents know about the information that you're collecting on their child and how that information is being used and also how they can opt out. So, you know, we've been looking at a few privacy policies that are up on bank websites that deal with data, what data they collect and then what they do with it, and one of the things that we've noticed is that many of them are not satisfying all of the requirements, putting the right information about how people can opt out from getting their data collected. They're not putting the right information about who's in charge of this data, who they should connect with if they have problems. And so, you know, for many banks, one of the issues that we have is that they might have been using a privacy policy from years ago, but the requirements for those policies have changed, and we're going to see why in a few minutes. So let's go to issue number 4, which is the cloud, because one of the things that we've seen, and I've mentioned before, is this idea, well, you know, we're collecting more data than we ever have before, we have to put it somewhere, and it's not always cost-effective to have it on the bank's premises, and so we might actually be using Using a cloud service provider to store our data there. And so we have to be careful. This is becoming much more sophisticated than it was before. So I think with the hacks that have happened and the breaches, cloud providers as well as their clients are really taking a look at the agreement that they've signed and making sure that the cloud provider has certain security controls in place to protect the data that you have. And also some access requirements. So for example, you do not want— if you are having an agreement with a cloud provider, you don't want that they can just, at their discretion, just turn off the account and lock you out of access to your own data. Be careful as you look at the agreement to see what those termination or suspension clauses about your access, because that could stop a lot of the business that you're doing. So those are little things in the agreement you want to take a look at. And sometimes there could be an error, right? So you don't want them just shutting off your access just because there's an error or they didn't get the right— you don't want a disgruntled employee turning it off for you. So you want to make sure only the right people have authorization to have access. and the hackers and the breach. And one of the things we're seeing here is new insurance coming out for cybersecurity. I know my insurance, it's automatic that they have cybersecurity with it this year, which they did not have in previous years, and I think that's just acknowledging that this is something that is occurring more often than not. It is a risk that businesses take, and So the insurance helps us sort of mitigate some of that risk. Next slide. So a lot of this will come into our issue number 5, which is about compliance, because I don't know if you've been seeing some of the headlines, but the FTC actually had a case against Wyndham Hotels in terms of security and the security breach that happened. And so we are seeing that a lot of these agencies, I call them the alphabet soup, are really looking at online activity, and not just social media use, but online activity in terms of cloud security breaches, things of that nature, and saying, you know, there are certain requirements that you need to address. Now those, some of them are put out as recommendations, So the FFIEC has this whole risk management guideline that it puts out, but it still does say it's a recommendation, right? But as most of these, they don't necessarily have a penalty that's connected to it. Some of them do, some of them do not. So you want to see who of these agencies you have to answer to in terms of your compliance, and then make sure that you are following the guidelines that they're offering. And so sometimes when we do online and social media activity, we should remember to have somebody from compliance on the team, not necessarily for them to just say no to everything that you want to do. Usually I find the better strategy is to say, look, this is what we want to do. How can we do it? How can we brainstorm or strategize the right way to do it that will make sure that it's in compliance? But sometimes the compliance and legal people don't know exactly what these guidelines are and what is possible. So, you know, it's very important that if you're working in social media or online activity for your bank and you see something come up, pass it along to them because they might not know. Okay, and there's more trade association white papers and guidelines that have come out to help offer some of that guidance, but we also have some federal and state laws that have taken into effect, one of the problems is that we don't have federal, a federal social media law, right? So the states have really taken over that. And so different states will have different laws in terms of social media privacy, in terms of online communications. And so it's just something that we have to be aware of so that we can do that. Next slide. And so, you know, these first 5 issues, as we look at them from the social media, the wearables, the data, the cloud, and the compliance, a lot to do with content, a lot to do with information that we need to run our businesses, but also information that we need to communicate with our clients and have that interaction with our clients. But sometimes it can seem overwhelming to a bank if they haven't started any of this, because there's a real fear that we can do something and then be in violation of compliance. But there are things that you can do to mitigate that risk. One of them is the digital risk assessment. And in full disclosure, this is what Digital RCP was put together to do, is to help you look at your footprint, help you look at your policies as they relate to social media and your online activity, and see see where you might be vulnerable in certain places. So for example, when we worked with one bank, and it was very interesting because in the middle of the process they discovered that they had an issue with their mobile app that wasn't in compliance, and this was an app that had been running for 4 years, and yet when they went to their app developer who had said, you know, he had done apps for other banks, He had never looked at the compliance part of it, and so they were dinged on their examination for that. So sometimes you don't realize you depend on these other vendors to do something, and then realize, hey, they're not actually doing it the way that we need them to. A risk management plan is very, very important. The FFIEC sort of lays out in most of its recommendations how you can build a risk management plan, starting with putting putting together sort of a task force to oversee this with somebody who will be held accountable, putting in place policies and a strategic plan. I mean, social media should be part of an overall marketing plan. Definitely the people doing social media should be talking to marketing, if not under their umbrella. But then training is extremely important as well. from agencies like the National Labor Relations Board is that having a social media policy for your employees is not enough. You actually have to go out and train them, let them know here is the policy, this is what you should or should not do, and this is where you can find some help for that. So as we continue, I'm going to get a little bit into the far side, or as we say, you know, go through the looking glass with Alice. Next slide. And the first issue that I want to talk about in here is artificial intelligence. So I hope you like this little graphic. It took me a while to find it, but I thought it was kind of cool with the green brain there. But what was interesting to me is as I was having conversations regarding this issue, you know, so much of artificial intelligence is already here. We already interact with it. If you have an iPhone, Siri is artificial intelligence. And so it's important to know that AI, to a certain extent, is here, and it's doing some of our work already. We see it a lot in back office work. So I'll give you an example. Some of the systems that process checks, right? When you go to an ATM, you don't need a deposit envelope anymore, right? You're able to just put in the check, Or put in the cash to make your deposit. You don't necessarily have all those deposit slips and envelopes that we used to have before. But there's a real concern that has come up with artificial intelligence, especially in later in this year. A couple of books have come out. One of them is called The Rise of the Robots. The other one is called Machines of Living Grace. And looking at the idea of, will artificial intelligence in these robots actually take Will, you know, we no longer need a face-to-face teller, for example? And a lot of that has happened already with the ATMs, right? A lot of people, they don't want to go into the bank. They want to go to the ATM, do what they have to do, and get out. And sometimes they're even angry when the ATM doesn't work anymore because they don't want to deal with people, unfortunately. So are we seeing a future where we don't need human tellers, that, you know, all that can be done electronically with some kind of artificial intelligence standing in front of them, and only have human interaction for certain things like loans, or maybe even that can be automated. I think it's something that we have to look at, because not only will it affect us and our banks as to who our employees will be, but the argument also goes that it will affect our customers and our clients, because if they lose their jobs, then we have an economic problem where they might not need banking services to that extent. So I think it's an interesting argument that's been going back and forth. The other side, of course, is saying that artificial intelligence will actually make our life easier. We can work less. We can have much more leisure time. So you've got those 2 sides there, right? And the big issue for me when it comes to that is customer interaction, because the truth is That for some people, they want a human in front of them. They want to talk with somebody. They don't necessarily want a robot. I know I hate when I do a call and it says press 1 for this and press 2 for this. You used to be able to press 0 and get to a live operator. Well, they figured out that trick now, and 0 just hangs up the phone on you. I think we're in a transition, but we're going to see a lot of this move in in 2016 as we go forward. And all of this does affect employee morale. If they feel that their job, you know, is not really unique anymore, there's no purpose, there's no meaning to it, a robot can do it, or that they see that some of their colleagues and coworkers are being replaced by robotics and artificial intelligence, it could affect employee morale as we go forward. Next slide takes us a little bit further. It is issue number 3.

Actually, Can I pull the brake lever just for a quick second?

Yeah.

You had mentioned ATMs and artificial intelligence, although the NCR ATM I don't think gets into artificial intelligence. Last month on the Banker Education Series webinar, we had Jeff Simpkins from Community Bank Consulting. You can watch the recording at the BES page on my website, but we talked specifically about branch transformation and interactive teller machines, which are driven by video screens. They accept cash and coin currency for deposit and can cash checks in cash and currency. Video screens— a teller can essentially operate 3 of those devices. Also talked a little bit about universal banker as we cross-train employees to be able to do more for the customer when the customer comes in, and then doing some of the more routine functions through these ITMs. I've been talking with a lot of banks that have had discussions internally about either using that for offices that might be in more risky areas where they are experiencing burglary, robbery issues, or going into other market areas where they can't afford a full staff because maybe it's limited customer traffic, but they still want to be able to provide service. And so I thought it was interesting when you had this slide. I wanted to make sure to mention this to kind of relay back to last month's episode and how I think the two of those can tie in together somewhat nicely.

Absolutely. It's about transformation, and you're going to see in 2 slides we're going to actually get back to that in a moment. So thank you, Eric, for adding that in, because it is more than just the ATM and House is being transformed. But I wanted to share this issue, virtual reality. It was really interesting. I don't know how many of you may have a New York Times subscription. As you can tell, I'm from New York even though I'm not there now. And so that's one of the things that I sort of hold dear to me. But a couple months ago, they sent out, and you see it in the picture, this little cardboard viewer. And it was designed and built by Google. But it is a virtual reality viewer. And I don't know how many of you remember about 10 years ago when they were talking about virtual reality and you had this big helmet that you had to put on and the idea was that you had to be immersed. Well, this cardboard glass, you just put your cell phone and touch the app and it's complete immersion with this viewer which is made out of cardboard. And what it brought to mind, because the New York Times has then been running a series of articles about how this virtual reality is being used, it is a new way of storytelling. It is their findings that customers, you know what, they're not excited about videos as much as they used to be, especially the younger customers. They want that next level of experience. And that's what we're seeing with this virtual reality. And now these cardboard glasses are so cheap. I mean, the New York Times gave it away to hundreds of thousands of people. And you can find it online for like $15, $20. I mean, it's very, very cheap. But there are more and more companies that are offering sort of these little films to be viewed in this virtual reality. And with going to start seeing in 2016 brands really use this technology to tell their story and to engage the customer in a way that they've never been able to before. It is a complete immersion experience. So if you get a chance and you can try it out, try it out, because to me it is the start of something that's coming in and it's going to be strong as we go forward trying to again reach the clients who have just— they're tired of all of these posts, all of these ads. Even the videos are losing their edge, and this is the next level of experience for them. The next 2 slides, if we can go to the next one. Issue 8 is about alternative payments, and Issue 9 is about alternative money. So with alternative payments, we're seeing this idea, you know, look at your card. Do you swipe or do you slot it? We've got chips now in our credit cards and our debit cards as a way again of trying to offer a little bit more security with this, but we also have a way of paying with our smartphones, Samsung, Apple Pay, and even I was talking to a small business community here and the idea is that, you know, this technology has bypassed the middleman, the merchant completely. You'll see the Samsung commercial where the guy is going to buy a cup of coffee and it's a mom-and-pop café and they say, you know, we don't have the technology to accept that. And he just points his phone at the machine and pop, he pays and out comes the receipt. And the wife is like, did you install something? And the husband is like, oh yeah, a boiler about 1978. But it's the idea that they don't even depend on merchants anymore to upgrade that technology. They are bypassing it with these. And so, you know, the convenience that it gives to the consumer to pay for things with their phone is something that we're going to see a lot more of in 2016. In 2015, there was a lot about the Google Wallet, for example. But now it's gone one step beyond a wallet scenario. The other thing we're looking at is virtual payments and the use of biometrics as a way to help with authentication. I don't know how many of you might be using 2-factor authentication with some of your online banking or mobile apps. 2-factor meaning that yes, they might put in a password But then they might have to put their fingerprint, or they might need to get a code on their cell phone, or they might take a picture of their retina. There is a crowdsourcing campaign out there for something called EyeVerify for mobile banking apps, which is after they put in their password, they put the phone camera to their eye and it scans the retina for identification. We're going to be seeing seeing more and more of those kinds of things, I believe, as we try to find a way to really secure information and make sure that identity is authenticated the best way possible. Which leads us to issue number 9, which is alternative money. And I bring this up because some of you may have heard of Bitcoin and what they call crypto This is basically a currency that's created by a software program. It's not backed by anything, gold reserve, for example. It was created, if you haven't heard about Bitcoin, and Bitcoin is only one of them. There are many others, Dogecoin, others that are out there, Litecoin. But the idea was that they would have a currency outside of the established regulated system. Well, that idea didn't work very long. New York actually started regulating Bitcoin as any other currency. We do have an IRS guidance that came out and said Bitcoin is not a currency, but it can be taxed as property. And people, you know, a lot of accountants are saying, I don't get the distinction between the currency and the property in a way. But this is still relatively new. But what I want to bring up to you is the idea that even though currency persists, the algorithm and the value of this currency is being adopted in other industries for transactions. And it's really making an effect against established traditional banks in terms of how much time it takes to transfer value from one account to another account, from one location to another location. And so that's what we need to be looking at with this cryptocurrency is how else is that software going to affect the types of products that we offer our clients and how we're offering it. So with that in mind, I know that that's a lot, but then the last issue that I want to bring up is a bonus issue, as I call it. This is about drones. Next slide, Eric. And so I don't know how many of you may be buying a drone or have bought a drone for your child or your significant other. They've estimated that 1.2 million will be sold this holiday season alone. The FAA yesterday released that certain sizes of drones need to start being registered as of December 21st. And this is a safety precaution. What we've seen is that, you know, is it a toy or is it more than a toy? And so you see I say be safe, learn first, and then pilot it. You know, what's interesting is that the FAA comes out and says, look, people People take years to learn how to pilot a plane. And although this isn't as big as a plane, it could have significant consequences. Unfortunately, I read another article that here in Georgia where I live, it's the state with the most amount of potential near misses between drones and commercial airplanes. And, you know, that is a big issue. Safety concern of people who, you know, they don't realize that if it's— if that drone goes into certain airspace, it leaves the control of that remote that you see in this picture, because that remote can only communicate with that drone for a certain amount of time. And then that drone is off on its own. And so if the last command for that drone was go up, it's going to keep going up beyond the 400 feet, which is the ceiling point that the FAA has given for these. And so I just wanted to point out there's an FAA drone safety infographic. You can get that. It's got some great information, especially if you're going to do a drone for it. But one of the things that also brings up is that drones are very often sort of set up with cameras. And sensors, and they can pick up not just pictures of people, but they can pick up data about people and about places. And so, you know, here the issue I put, you know, drone flying over a bank, but it could also be what if a bank is sponsoring an event in a park or something? Are there privacy issues, security, safety, confidentiality? I mean, there's so many things. that the drones actually bring up, and we're just now with the FAA starting to put in some rules trying to protect people. So, you know, I just wanted to put this out there as my PSA, that if you are getting a drone, please make sure to supervise whoever is using it, read the instructions, keep it under 400 feet. And don't put it over somebody else's yard. Okay? So again, with these last 5, if we go to the next slide, so what do you do, right, with these kinds of issues? And I think the most important thing is be aware, take notice. You're going to see these things in the news. These are not things that get hidden, right? But they're put out in the news, they're put out in alerts. If any of these things interest you, Create a Google alert with that, you know, drones and privacy, or drones, banks, and privacy, for example, as a Google alert. And then anything that is out there on the internet that's in the Google database, Google will then shoot you an email about it. And this is an easy way to keep up to date with trends. You know, professional development. There are many courses out there. This is a free webinar. All the banking education series that Eric does you know, always talks about the latest innovations and trends, so it's good for you just to be involved and listen and learn. It might not be something that's relevant at this moment, but it's really interesting how everything comes around, and when you least expect it, you say, oh my God, that's it. Employee alerts. The other thing is to keep the employees informed about some of these things and how the bank has decided to deal with them, what the bank policies are. and that nature, but also employees, you know, they're reading, they're online, they're getting information, and, you know, maybe there's a way to set up that employees can share interesting things like this with other employees, their coworkers, and their supervisors so that the bank can be alerted. And what you're trying to be is you're trying to be proactive, you're trying not to be just reactive, something happens and then we deal with it, but we're looking at, you know, what could happen, right? And that's what risk management is all about, looking at what could happen and then taking steps so that we can prevent it from happening. Okay, so next slide. So that's my presentation. I know it was a lot of a whole bunch of issues out there, and so we'd like to open it up Excellent.

Well, as a reminder, if you've got a question, feel free to go ahead and use the chat function in your control panel, which is likely floating on the right-hand side of your computer screen, and we'll keep an eye on those. I do have a couple of things that I wanted to mention specifically. Does this now mean that banks are going to have to have a BYOD, bring your own drone, policy?

No.

They might be coming in with their own little personal drones to hover around them. I say that—

You know, drones come in all sizes. Someone's joking me. Yeah. I saw one in a catalog for Hamacher Stemacher, you know that catalog, and they had like this little drone that fits in the palm of your hand. So again, when I was talking about the wearables and these devices, how small is Right, and they come with a camera.

Yeah, exactly. Well, you know, while it may not necessarily be a drone, as we talk about video and mobile devices, I know a couple of the tools that some of our clients are actually looking at are services like Periscope and Meerkat and being able to livestream from their device while they're at the office. You may be sitting at your desk and I might walk by and go, hey Deborah, how you doing? How was your weekend? I'm scoping right now, not realizing that in the background is your computer monitor with sensitive client data on it.

Right.

I'm inadvertently capturing Social Security number, date of birth, account number, balance information. Even though the focus of my video is to talk to you, somebody watching the video can look around and go, oh, look at that, and pause and zoom. Now all of a sudden they've got all the customer data that they need to conduct identity theft and fraud. So, you know, pretty hot buttons in the world of digital, and I don't think either one of us really want to be the Chicken Little scaring people not to use them, but make sure that people are aware of the risks that they propose and just train your employees and kind of keep an eye out for things.

And that's probably That's probably the biggest issue is I don't think employees necessarily do this maliciously, right? I think they're just doing their everyday work and they don't realize the consequences that can occur. And so that's why training becomes so important is to show and share with them some examples of what could happen, and all of a sudden you get that, light bulb on their head that said, oh my God, I didn't think about that.

Yeah, so we've got a question, and this may be somewhat of a broad question. I don't know how you're going to answer it. I'm excited, but what would you say is the biggest legal hot button for social media for a community bank in 2016? How's that for a loaded question?

I would say it's about protecting your reputation. So, you know, people don't always understand what defamation is, and they get in trouble when they think defamation is any negative comment, and then they try to react to it, when in fact defamation has a very particular legal definition. And employees can complain about their managers, and it might not be defamation.

They—

customers can complain about people at the bank, and it might not be defamation. And yet we see some reactions where immediately it's, oh, I'm going to put a lawsuit. And, you know, from a legal and a marketing perspective, that's That's probably not the best initial response to take when you see something negative about you, but it is sort of understanding what's being said and then how to approach it. And that's why, you know, things like that end up with employees being fired, end up with, you know, reputations being ruined quickly. So that's how I would answer it. And one, the defamation aspect, and then two, the compliance issues. So Eric, how would you—

I know, well, I think one of the biggest exposures, and I'm not an attorney, I will preface this because you've trained me very well to provide this disclosure, I'm not an attorney, so by no means is what I say legal, but I think just the employee education and awareness and making sure that staff is cognizant of their actions And I think, you know, nobody wants to get themselves or their employer in trouble, but if you say something inadvertently that might very well get you disciplined without really realizing it, that seems to be innocent, or, you know, on the other side, not necessarily all the negatives, but, you know, spend some time so that if you have employees that maybe want to help you as an organization, in social media, and, you know, what can I do to help spread the word about all the great stuff that the bank is doing in the community? Can I be of assistance? Can I help be a sounding board for my friends, because I'm proud of where I work? I think all too often we spend time trying to figure out how we can restrict the actions of our employees, and I'd like to see, you know, some effort into how can we empower our employees to be advocates of ours, to help us get the good message out there. And, you know, I think that's going to be an interesting evolutionary process because we've talked several times between the two of us about how that can't be mandated and you have to be very careful if you put together a program to enforce or to recommend those things. But I think figuring out ways that employees can remain safe and understand the guidelines, but also those that want to participate and help need to know what they can do to play a more active role within their organizations.

Yeah, I would agree. Sometimes people just need guidance. What can I do? I don't want to get in trouble. What can I do?

Yeah, well, and just within the last couple of minutes, one other thought popped into my head, and I know we've done several DRAs together, and in almost every instance We've seen language, and maybe it's coming from the top down, but language to the effect of employees are not, you know, are prohibited from saying anything negative about the bank in public forums, or anything that you say in social media is, you know, owned by the bank, or it's public domain. And absolute statements— again, you're the attorney, so I'll let you chime in on this— but from what I've seen, the absolute statements in policies are where you can also get your organization into trouble if you're not careful.

Yeah, we do have the National Labor Relations Board, which has sort of issued now 3 memos about social media policies, what can be in there, what cannot be. And, you know, we have to be careful about our language. We can't use language that's too vague. We have to make sure that employees can understand what the policy is. There are some things that we can say, you know, employees need to be cognizant innocent that anything that they say they're responsible for, for example, but we cannot outright prohibit them from saying anything negative about the bank online.

Yeah.

And there are nuances to that, which is why one of the other things that we've seen is that as we do these DRAs and we review the policies, we noticed a lot of policies are sort of copycats. There's one policy and then 5, 6, banks use the same policy or more. And so if the policy was wrong to begin with, now we have 6 banks using a wrong policy and they're all in violation. And so, you know, one thing that I would just caution people is don't necessarily accept a policy from somebody just because it's there. Okay, you have to make sure that it is in fact in compliance with the NLRB.

Yep.

Just be aware of that, which is why when people say, do you have one to give us as an example, we sort of shy away with it. We can give you guidelines on how to write one, but we don't necessarily give a sample because it depends on the state that you're in. States have different laws regarding social media and employees.

I've got your closing slide here with all your information listed, but I do have one follow-up question on the concept of employee empowerment. And so somebody says, so where exactly are we going to learn how to employ or how to empower our employees in what they can do? I want to toss that softball over to you, Deborah, because you and I have been talking about this exact issue, but without it sounding like a digital RCP commercial, maybe share what we're working on. But in general, how can one go about learning what they can do with their employees?

Yeah, one of the things is always to ask those in your peer group what are they doing, what have they seen that works. And the reason why I say your peer group, meaning people that are in the banking industry, because the banking industry is so regulated. So things that other types of businesses can do, bankers can't do, just like there are things that lawyers can't do either because we are regulated even though it's self-regulated, we are regulated in a way. So, you know, this is a question that has kept coming up with our clients, and so Eric and I are actually developing a program for bank employee advocacy that will be compliant, because one of the problems that we're faced with are disclosure statements and disclaimers and the confidentiality confidentiality rules that we're subject to in this industry. And so, you know, one place is obviously Digital RCP. Another one, if this is something that you're just interested in looking at, Google Alerts is something that then you can set it up and see what's happening. You have to do some research and your homework on this. You just can't take the standard employee advocacy programs that are out there that a lot of social media marketing companies say, oh yeah, we have one. Because they don't fit a regulated industry, so you want to be careful about that.

Yeah, good, good, good. Well, Deborah, we are just shy over, but I know we had a little bit of glitchiness on my part with the whole getting the webinar kind of going and screening, but I want to thank you so much for your time. This was great, and even though we've worked together for at least a couple of years now, I always seem to learn something brand new every time I get a chance to listen to you speak, and that certainly was the case again today. So thank you so much for joining us.

You're welcome. Thank you for having me.

Yeah, good. Well, that concludes, I guess, all of the Banker Education Series webinars for 2015. We'll be back in January, so again, if you'd like to receive notifications, be sure to stop by the Powered by wsi.com/BESpage and click on that email subscription so you'll get notification of our next show coming up in January. And if we don't have an opportunity to talk before the new year arrives, have a very happy holiday. Merry Christmas, Happy New Year, all those perfunctory holiday greetings, and we hope to see you back here on the Banker Education monthly webinar series very soon. Take care, everybody. Bye-bye.

Bye-bye.