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Hearsay Social CEO Clara Shih: The Vertical Cloud and Regulations Will Have a Profound Impact on Business in 2016

shutterstock_293401085In 2015, the exponential changes taking place within the technology industry was a recurring theme in the business world. Change was no longer just ubiquitous; it was accelerating. Today, this message has become even clearer as technological advancements continue at a rapid pace and are revolutionizing every aspect of our daily lives.
I wrote how this is fundamentally changing the consumer experience in a recent article published by Fast Company entitled “The Rise of Millennials, Crowdsourcing, And Automation.” But what about the enterprise? Here are two massive trends that business leaders need to watch in 2016:

The vertical cloud comes of age

For some years now, many cloud vendors have sold their products to multiple industries – an approach that has worked exceptionally well for companies like Workday and Salesforce. In 2016 and beyond, thanks to key technology developments across the public and private arena including low cost web hosting services and no-cost open-source programming languages, we will see the vertical cloud come of age, particularly in highly regulated industries such as healthcare, government, and financial services – industries that have largely been neglected by Silicon Valley due to the unique complexities involved. According to Frost & Sullivan, the opportunity in healthcare cloud will grow from $903 million in 2013 to $3.5 billion in 2020, while TechNavio predicts cloud financial services will grow 25% per year through 2018.
With the privilege of focus, vertical cloud solutions will be game-changing with obvious benefits. It offers more tailored offerings to address specific needs and solve unique industry challenges; it offers rapid ease of deployment, eliminating the need for lengthy implementations to customize and “verticalize” a “one-size-fits-all” product; and it allows those vendors to develop true industry expertise and deeper customer relationships such that customer feedback can rapidly evolve into newer and better solutions over time.
Ultimately, this enables those vertical cloud solutions to grow faster and establish dominant market share than traditional software vendors. Gartner estimates that the 2015 vertical spend of $113 billion will grow at 7 percent per year, something that Salesforce took note of last year (following Infor’s lead at their Dreamforce event) by doubling down on their vertical-focused strategy.

Regulators will aggressively play ‘catch-up’ to keep up with the impending regulatory tsunami

In 2016, there will be a growing number of regulators and regulations from the SEC, FINRA, DoL, CFPB, IRS, CFTC, OCC, state regulators, and others. The rapid and revolutionary shifts enabled by technology in recent years have caught regulators off-guard in everything from hospitality and transportation to healthcare and cybersecurity. But in 2016, I expect regulators across industries and countries to aggressively play catch-up and apply new levels of pressure on many disruptive companies.
We’re seeing this start now, with regulators across the globe poking holes in Uber’s business model. Right here in San Francisco, Prop F, aimed at regulating AirBnB’s impact on the tight housing market, failed to pass but still garnered 45 percent of the popular vote.
Not surprisingly, this game of regulatory catch-up is even more pronounced in highly regulated industries such as financial services. For example, the Department of Labor has proposed new rules requiring financial advisors to disclose any potential conflicts of interest with funds they recommend, while leaders at the SEC consider if and how to regulate robo-advisor firms, perhaps holding them to a fiduciary standard for offering (automated) advice.
Hearsay Social, for one, is helping firms and advisors navigate the impending tailwinds by keeping them abreast of these changes and offering solutions to remain successful.
As regulators continue to keep up with these massive changes, 2016 will be a year where businesses across industries will need to prepare for the shifting regulatory landscape while still delivering value to their customers. To overcome the overhead costs and time required to manage to regulatory guidelines and policies, companies will need to find ways to drive efficiency and growth by leveraging technology that enables their workforce to be more productive and compliant.
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FCA proposes new social media rules

Twitter_MagnifyingGlass_FCA_Guidance

In new guidance consultation issued August 6 2014, the Financial Conduct Authority (FCA) aims to clarify the regulator’s approach to social media (prior guidance was published in 2013) and provide guidance for how firms should handle financial promotions through social media communications.

“Our overall approach is that financial promotions, whether on social media or traditional media, should be fair, clear and not misleading,” said Clive Adamson, Director of Supervision at the FCA said. “We have had extensive industry engagement on this issue and we believe our guidance is a sensible approach that doesn’t affect industry’s ability to innovate using new forms of media.”

“We recognise social media are constantly evolving,” said Adamson, “We, therefore, welcome feedback to today’s consultation and look forward to continuing the discussion with industry.”

Standalone compliance is also highlighted in the guidance. Each communication should be reviewed and comply on its own. For example, legal disclaimers should be given for each statement that is a financial promotion. These rules apply to all members of the financial firm that communicate “in the course of the business” and not just advisors or agents.

According to the proposed guidance, firms need to have adequate systems in place to review, approve and supervise financial promotions. In addition, firms should be keeping a record of communications on social media, and they cannot rely on digital media channels (the social networks) to maintain the records because they do not maintain complete records and are often subject to change. To assure compliance, firms can leverage third-party tools, such as a solution like Hearsay Social, to keep records of social media communications.

The guidance addresses challenges with the limited characters (140) available on Twitter, but indicates that the limited space provides no excuse for firms to not make it clear when something is a promotion. In fact, the FCA suggests one way that firms might indicate promotional content is by simply including the hashtag “#ad” in any promotional tweets. The guidance also suggests that firms consider image advertising, however, it advises that firms should not rely on just the image to indicate whether a tweet or message is promotional.
Firms can also address requirements by just tweeting a link to a website with a financial promotion clearly indicated. For example, “To see our current mortgage offers, go to www.fakemortgages.co.uk.”
Overall, it is good to see the regulator addressing the unique nature of social media communications, as it requires different regulatory requirements than more traditional online media. The proposed guidance, “GC14/6 Social media and customer communications: The FCA’s supervisory approach to financial promotions in social media” can be found here.
Comments on to the proposed guidance can be submitted before November 6, 2014 via email to Richard.Lawes@fca.org.uk.
Disclaimer: The material available in this article is for informational purposes only and not for the purpose of providing legal advice. We make no guarantees on the accuracy of information provided herein.
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Event roundup: Hearsay Social October schedule

Yes, Hearsay Social is a software company. No, that doesn’t mean we’re always glued to the warm glow of our computer screens.

Kevin Eversen, Sr. Strategic Account Manager, at the SIFMA Social Media Seminar

In fact, our team plans on attending quite a few events over the next month and beyond that too, with the aim of spreading the word about the expanding social media enterprise and Hearsay Social’s role in that new wave.
Here’s a run-down of where in the world to find us over the next couple weeks:

Web 2.0 Expo New York 2011

Web 2.0 Expo
October 10-13
New York, NY
Attending on behalf of Hearsay Social is Kristin Shevis, director of sales and business development. Find her and talk social media!


 
 
 
eMarketing Conference
October 12
Providence, RI
Hearsay Social CEO Clara Shih will deliver the opening day keynote address at this event, focused on social, search and email marketing. The keynote will be followed by a book signing for The Facebook Era owners.
 

 
 
Women Advisor’s Forum
October 12
Boston, MA
Same day as the eMarketing Conference (above), Clara will be giving a talk on social media compliance and business value at this more financial-focused event for women. There will also be a book signing.

 
 
 
 
 
CIO Insurance Summit
October 16-19
Miami, FL
On day two of this event for tech heads in the insurance space, Clara will deliver the gala dinner keynote, discussing the strategic role CIOs play in the social enterprise.

 
 
 
 
 
Media Bistro Socialize West
October 20-21
San Francisco, CA
Speaking on the second day, Clara will talk about the evolution of reputation management and how it affects business. The Hearsay Social team plans to make an appearance on both days.

 
 
 
 
FINRA Advertising Regulation Conference
October 27-28
Washington, DC
Hearsay Social is one of only a few confirmed exhibitors at this conference, drawing the evolution of advertising rules and regulations on social media communication.
We hope to see you at one of these upcoming events!