When your business is based on communication, not having a channel to talk through is like a restaurant that’s out of food: The revenue outlook isn’t so promising. But that’s what’s happening at some financial firms. 

Because of compliance weariness, a population of financial services companies fear communicating through social media, which causes them to miss out on relationship developments, argues Chad Bockius, chief executive of Socialware, a social media compliance and engagement vendor. There’s a “huge brick wall for compliance,” Bockius tells Bank Innovation. “The number one concern is meeting the letter of the law.” But technology, like what Bockius’s offers, is emerging and partnering with others to help fill that void.

Indeed, Socialware officially buddied up with LinkedIn this week, a new partnership that aims to take care of the compliance hurdles a financial services member would face. The Austin-based startup says it’s compliant with the SEC, FINRA, IROC and FSA and state regulations on electronic communication. Practically speaking, that means monitoring what people are saying and doing as it relates to the industry. Even something that sounds innocuous like “liking” a comment could violate a rule, if the thread deals with a product recommendation, he explains.

The goal of the LinkedIn Socialware alliance is to foster engagement of the finance community – a large LinkedIn user base. LinkedIn is “the number one network among financial professionals,”  Bockius says.

Besides the obvious driving engagement upshot for LinkedIn – and wiping its hands of compliance headaches –  the relationship grants Socialware access to LinkedIn’s private technology, which enhances its own product.

What this move truly underscores though is the need for financial services to go wherever their customers are – including online. Mercator Advisory Group published a report in December that emphasized the importance of financial firms participation in social media.

“Financial firms that wish to excel at CRM must establish a presence and voice in most of the same online communities where their customers spend time. Increasingly, that means participating in social media of many types,” writes Patricia McGinnis in the report.

For Socialware, this void should only mean growth, especially as regulators have their eyes on social media strategies. Though it has 100 clients currently, the company recently secured $3 million in funding, and Bockius revealed to Bank Innovation that he will be announcing a new product soon. For now, the product is under wraps.