People of all ages are spending more and more of their time online, interacting with others in a digital environment. Consider the trajectory: In 2005, the Pew Research Center began tracking social media adoption, and at that time, 5% of adults in the U.S. were using social media. In 2011, the share included about half of all adults.
And today, we’re at the point where nearly three out of every four adults are using some type of social media.
In addition to the level of convenience provided by social media, the explosion of consumer mobility has made communicating with and marketing to borrowers easier than ever. But as pervasive and influential as it is, social media isn’t something that is the topic of a lot of industry discussion … yet.
What’s at stake?
Following the recession, many acts and regulations were put into place to ensure lenders were communicating truthfully and appropriately with consumers. The new capabilities introduced by social media are accompanied by old risks – compliance, legal, operational and reputational. There are myriad privacy and transparency issues related to consumer protection of which lenders must be aware, and negative public opinion sourced from unsatisfied consumers can affect a lender’s brand integrity, even if no laws have been broken.
And, in addition to damaging a lender’s reputation, the punitive fines that result from mistakes (intentional or accidental) on social media range from eye-opening to jaw-dropping. The Consumer Financial Protection Bureau may levy a $5,000 fine per day for a violation, up to $25,000 per day for any reckless violation, and up to $1 million per day for any knowing violation of any law, rule, final order or condition in place.
Finally, federal regulatory requirements mandate that records must be kept for a minimum of two years, and in some states, it’s longer. These records must be easily accessible and searchable, in accordance with e-discovery rules. Your compliance department should have effective processes for reviewing, supervising and managing content from all social media accounts.
Social media policies are a requirement, not a recommendation. A lender can choose to develop its own policy in-house or work with a third-party social media management company, but in either case, the lender is 100% liable in the event any violation occurs. The good news is that a comprehensive social media policy isn’t rocket science; it involves many of the same strategies and tactics that are used in other borrower-facing channels.
For example, you are responsible for the things said publicly in an advertisement and privately during an in-person conversation with a borrower. Employees must be aware that any message that is distributed has the potential to be viewed as reflective of the lender’s policies and/or opinions. As lenders, we want our mortgage professionals to have personality, but there can be zero confusion in what is being disseminated. Any channel that is being used to market or solicit business should be reported to compliance and marketing to ensure the proper oversight is in place.
Once that oversight is in place, compliance and marketing must work cohesively to ensure employees know that a policy exists and where to find it. Internal awareness is critical to the success of a lender’s social media compliance, and everyone should be on the same page in terms of what’s permitted, where to tread carefully and what should be completely avoided.
Additional steps to success
True success on social media is about more than just remaining compliant. Here are some additional things to keep in mind:
- You must understand the specific purpose of each channel; that purpose will dictate the tone or overall appropriateness of your message. What works for Twitter may not translate to Facebook, and what might be relevant to a LinkedIn group isn’t going to be appropriate for Yelp!. It’s also important to know that messages sent via email or text message don’t constitute social media, but such communications may be subject to a number of laws and regulations. Ultimately, a misdirected message increases the likelihood of a compliance violation and reduces the effectiveness of your overall efforts.
- You can be more personable: Social media isn’t all about sales. It’s an opportunity for you to engage with potential and existing borrowers. Above all, lenders need to be genuine in their communications: Focus on making that connection with the audience, and interact with others. Make the public aware of your profiles, and encourage them to interact with you. Also, buy into the network effect (which states that a service becomes more valuable as more people use it) because a thriving social media presence is symbiotic. As friends, partners and customers help you, make sure you’re helping them too.
- You should be versatile with your content: How your message is conveyed on social media will determine its success. Keep in mind that the attention span of today’s consumer is shorter than ever, so messages should be concise and get the point across as quickly and effectively as possible (without sacrificing the integrity of the message itself). Graphics, videos and any visual component have been proven to drive engagement, as well. In addition, drafting and scheduling messages in advance will prevent last-minute scrambles and help you coordinate outreach with key events or calendar dates.
- Prioritize quality over quantity. The goal is to boost engagement and get people interacting with you, so if this is achieved through a couple of posts a day, why bother spamming (and potentially alienating) your audience? Remember: It’s social media, not sales media.
Social media is still a new medium, and there are many nuances and requirements that are being uncovered almost daily. However, all of the various consumer-facing channels have tremendous upsides and can help a lender connect with borrowers. We still have a responsibility to market to people responsibly, and transparency and honesty should be practiced in every channel.
Be smart: Don’t comment on legal matters, don’t offer financial or legal advice, and don’t make disrespectful comments or be argumentative. Work closely with your compliance department to provide employees with a policy that outlines what’s permitted and what’s to be avoided. If done correctly, the risks will be mitigated, and you’ll reinforce your brand, expand your audience and grow your business.
Whitney Blessington is vice president of marketing at Churchill Mortgage, which provides conventional, FHA, VA and USDA residential mortgages in 44 states. For more information about the company, visit churchillmortgage.com or follow the company on Twitter (@ChurchillMtg) and Facebook (facebook.com/churchillmortgage).