Social media platforms are invaluable for connecting companies with their customers, financial community, and media. Sharing information on social media can reduce the information asymmetry between companies and their stakeholders in a timely manner. However, several factors, including a lack of planning, management, and training, combined with the unpredictability of online behavior, can expose companies to considerable risk.
Non-compliant social media posts and lack of profiling and monitoring can cause serious damage to a company’s reputation, as well may trigger investigations by regulators, damage long-term relationships with both partners and users, and risk cybersecurity attacks. Certainly, companies and individuals can develop strategies to be selective regarding the disclosures they make on social media and avoid tweeting negative information, but even positive and well-meaning posts can lead to negative outcomes. Given the inherent risks, companies need to become aware and more disciplined about their social media activities and closely managing and monitoring them. Though, companies are not ignoring the risks of social media altogether, the risk associated with employees’ use of social media comes in a variety of forms, the most prevalent being the branding and reputation damage via the employees use of official social media channels exposing the brand to scams and phishing attacks, followed by fraud and counterfeiting through social media accounts.
The growing number of cybersecurity risks and the expansion of responsibility for managing these risks beyond the IT department abilities, makes it imperative that organizations update their security policies and processes for the digital age. Companies need to review their policies and procedures, assuring they cover the new risks introduced by social media and mobile communications, including third party, public and consumerized infrastructure, as well as internal and external threats.