Why Mortgage Lenders Need Social Media

Posted: March 16, 2010 in Uncategorized

Many of today’s traditional companies are wondering what the deal is with this social media craze. It seems like everywhere we look online there are “F” icons for joining a group on Facebook, or Ts for following someone on Twitter. We even hear it on TV spots that companies are no longer promoting their personal domains, but asking customers to find them on social media networks. What does this mean to mortgage lenders?

The time has come, social media can no longer be considered a simple platform for high school and college kids to share pictures and chat about their latest activities. (But it has become an avenue for students to set up banking accounts and learn about loan rates.) Today’s social media communications have spread to every demographic. This medium is effective and incredibly cheap if not free, and if you’re a mortgage lender and you aren’t taking advantage of it, you could be throwing your advertising budget down the drain.

When consumers look for a place to take out a substantial loan they want a company they can trust.  People want to feel connected with their lenders on a level that allows them to gain a better understanding of their personal finance, as well as their unique borrowing needs. They want an institution that is transparent, genuine, and knowledgeable about today’s society.

Social media communications allow for banks and credit unions to educate, as well as develop genuine personal relationships with their customers. Twitter and Facebook provide platforms for updates about products, customer service advantages, and reduced loan rates, and did I mention that they are free? Why waste your valuable ad money on a TV spot that people are going to TIVO through, or on a print ad that’s going straight to the garbage (and is not economically viable)?

Blogging is another way for banks to promote themselves and the services they offer. Not only is blogging free but it also helps search engine ratings and brings interest to your company’s unique qualities. You can blog about anything from personal finance issues, mortgage news, or even profile your distinguished loan officers or other employees to put a face to your services.

Twitter is a way for banks to update their followers automatically on rates, promotions, or simple insight into how your organization works. You will reach a much larger audience by tweeting about a promo than you would by simply placing an ad icon on your website. The likelihood of your customers “poking around” and paying attention to a site ad is slim to none, but tweeting is a guarantee that they will receive the message via their cell phones or computer access in real-time.

Social media communications allow for lenders to better connect with customers and build a reputation as being customer-focused and responsive. Nonetheless, lenders must remember that even social media interaction must be compliant. Here are some tips from the ABA Banker Journal to keeping these customer communications in compliance:

  1. Conduct a compliance risk assessment. Don’t forget to assess the compliance requirements for a specific activity and evaluate the risks that are associated with those requirements.
  2. Establish policies and procedures. Clearly outline the details of offering and ongoing servicing. Be sure to cover everything, from start to finish.
  3. Establish controls to help address the risk identified in number one. Controls may include a pre-publication review by compliance staff assigning responsibility for specific functions associated with the activity, as well as dual control, second review, and detailed checklists.
  4. Set up a monitoring process. Identify and correct errors before the examiners or customers do.
  5. Report to management. Inform management of compliance exceptions found through monitoring as well as regulatory developments.
  6. Vendor Management. Follow this compliance process even if using third-party vendors, because the lender is ultimately responsible.

Social media communications provide an active avenue to put a face and a voice to your mortgage department. It also allows for consumers to become co-creators of innovation by responding to lenders and providing input about what type of service they are looking for. With proper use, you will end up saving those advertising dollars while keeping your members informed and engaged with one simple click.

Resources:

The American Banker’s Association. (2009). Six new-media compliance tips. ABA Banking Journal. Retrieved from http://www.ababj.com/index.php?option=com_content&task=view&id=759&Itemid=1

Gillin, Paul. (2009). Secrets to Social Media Marketing: How to Use Online Conversations and Customer Communities to Turbo Charge Your Business. Fresno: Quill Driver Books.

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