Risks and opportunities of social media

The rapid growth of social media over the past decade has left regulators and financial institutions lagging behind as they attempt to deal with the risks it poses. While the industry has made progress in dealing with potential risks, industry experts warn that there are numerous areas where they still have a long way to go

The rise in the popularity of social media is evident in the growth of networks such as Facebook, which in less than a decade of existence has attracted more than one billion active users, and Twitter, with over 500 million active users since its launch seven years ago. The rapid spread of information in a hyperconnected world has potentially serious consequences, as highlighted by the World Economic Forum (WEF) in its presentation of its global risks for 2013 – one of the top three global risks