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The Power Of Social Media In Financial Services

Recurring revenue from existing customers is essential for continued success in any industry, but it’s especially important for relationship-based services like banking. Since the housing crisis in 2008, banks have revamped their community reinvestment and outreach programs to rebuild their image and relationships with their customers.

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While the CFPB has traditionally provided an outlet for customers to file complaints, social media has become a powerful marketing tool for brands, and banks and financial institutions are no exception.
Consumers increasingly turn to social media to both leave reviews of companies they love and lodge complaints against policies they don’t like. As a result, public feedback on social media channels are gaining influence over consumer protection in the financial industry.

Changing Tides of Influence

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Given new leadership and recent turmoil at the CFPB, banks and consumers are asking what will happen next for the regulatory body. While it’s unclear exactly how the CFPB will operate moving forward, the question may not be what will happen, but what is already happening?

Social Posts are Publicly Available

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Since social media amplifies both positive and negative feedback, consumers’ dependence on online reviews can greatly impact revenue and customer acquisition strategies. With 91% of consumers regularly or occasionally reading online reviews, reviews have a significant impact on a business’s reputation.

Social media may feel overwhelming at the onset, but when done right, it has the power to position brands as leaders in consumer protection, customer service, and grow a loyal consumer base.

Faster Response

The educated consumer uses the publicity of its reviews as a bargaining tool: banks can either respond quickly or risk their reputation.

Perhaps the most well-known example of this in the banking industry is Bank of America’s attempt to institute a $5 monthly fee for debit card use in 2011. According to reporting from the Washington Post, within a few days 300,000 people had signed a petition against the change that circulated widely on Facebook and Twitter. Another 21,000 people took to social media pledging to close their Bank of America accounts if the changes took effect. Shortly thereafter, Bank of America removed the proposed fee.

It’s easy to see this need for immediate response times as a burden on banks. However, it’s also an opportunity for banks to differentiate themselves from the crowd with public examples of responsive customer service.

Consumer Protection in the Social Media Era

Banks and other financial institutions should redouble their efforts and attention on the power of social media in consumer protection and customer service. In this age of constant connectivity, consumers hold the power to influence many industries, including financial services. Incorporating customers’ use of social media into a financial institution’s best practices demonstrates reliability and accountability, and in return gains their customers’ trust and loyalty – a win-win for all.

About The Author

Jessica Zeigerman

Jessica Zeigerman, Compliance Professional at RiskExec, has spent more than a decade as both a senior and executive level analyst in HMDA, CRA, and fair lending at several national banks including National City, Cardinal Bank, and Capital One. Her work includes identifying risk and regulatory exposure as well as gaps in lending and forecasting. Jessica has significant breadth and depth of experience in developing, managing, and overseeing retail operations, loan officer trainings, and outreach programs related to fair lending and community reinvestment. Prior to Asurity Technologies, Jessica served as the Vice President, CRA Officer at WashingtonFirst Bank; AVP, Fair Lending Specialist at Cardinal Bank; and as a Community Reinvestment Act Compliance Manager at Capital One.

Business Intelligence And Financial Services

It all comes down to accuracy. Managing risk and company performance can be daunting in any industry, but it’s especially so in financial services, where investment and hedging positions re-price in real time. What may have been accurately reported last week or even this morning may not be accurate by the time an executive accesses the information. Senior executives need access to the key indicators that measure the performance of all departments and regions, as well as each employee in their company, and they need those performance indicators in real time.

Fortunately for lenders, there’s such a thing as business intelligence technology, a software connectivity solution that can mine, gather, assimilate and analyze all kinds of information within a company. Because it can provide information in real time, it can get all stake holders in a company on the same page and align everyone to the company’s common corporate goals.

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In the vast majority of companies, the data is already there. Business intelligence technology just makes that data usable. It transforms company data into actionable information that can help mitigate losses or reallocate resources to the most profitable company services and products. More specifically, it can bring the disparate processes in a financial institution in line with the company’s earnings and expense objectives.

So, how does all of this information and relation to the bottom line play out in real life? With action. Because business intelligence can provide real-time reporting of employee performance, executives can find weak links almost instantaneously and correct problems quickly before they lead to significant losses. In mortgage banking, business intelligence systems can ensure that loan officers, loan processors, underwriters, and closers are communicating together in real-time quantitative measures such as the number of loan applications per loan officer, the speed of loan processing, and other workflow actions that are an important part of being a high-quality, high-performance company.

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They say that there are three sides to every story, your side, the other person’s side, and the truth. Not so with business intelligence, which provides financial services firms with one version of the truth in company operations. Key executives don’t have to judge which disparate reports on company operations are accurate. With business intelligence technology, a CEO can access relevant company information, mine the data and apply powerful analytics to monitor operations and forecast key business metrics, such as earnings, revenues, and expense, all in a matter of moments.

Business intelligence software can overlay any existing corporate software system. It has the capacity to immediately provide a real time view of a financial company’s collective data. Plus, it’s easy to use. The software provides dashboards so that supervisors can view the strengths and weaknesses within the company on one screen. Data is constantly updated so supervisors have the latest relevant information with which to drive the company.

Next week we’ll look at specific ways that executives can leverage business intelligence.

About The Author

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As co-founder and CEO of Motivity Solutions, Tyler Sherman is responsible for establishing the vision and long-term strategy of the company. Tyler has more than 20 years of sales, marketing, and executive leadership experience across the mortgage and technology industries. Before founding Motivity Solutions, Tyler was a co-founder of Watermark Financial Partners, where he led the sales team to unparalleled productivity and profits. The sales and marketing programs developed by Tyler led Watermark to become one of the largest organizations of its kind. Tyler understands the need for flexible technology that can help companies navigate the inevitable ebbs and flows of any industry. His capabilities for using technology and business intelligence to enhance the sales and marketing functions helps create a sustainable competitive advantage for Motivity’s clientele. Tyler’s operational and executive expertise in running successful companies effectively aligns Motivity’s interests with that of its customers, and his philosophy of creating value for all stakeholders by building long-term relationships through ethical business practices is applied to all aspects of Motivity Solutions. Tyler has a B.S. in Finance and Marketing from the University of Colorado and an MBA from the University of Denver.

New Financial Services Giant Forms

Recent headlines have been dominated by big mortgage technology acquisitions. We’ve discussed the joining of LPS and ServiceLink to form Black Knight Financial Services. We’ve also discussed the acquisition of Interthinx by First American. Today I got the scoop on another big acquisition that will result in the formation of a big financial services company in our space. Here’s the news:

The Global Real Estate Services group (GRES) of RR Donnelley & Sons has been acquired by Covius, LLC. The newly formed entity will maintain its core competency to provide industry-leading commercial and residential real estate advisory products and services to the financial markets and will have offices in Atlanta, Los Angeles and Salt Lake City. Covius is a provider of real estate advisory services, delivering intelligence-based solutions, data and analytics, risk management, and innovative technology that both commercial and residential financial services providers have come to trust.

The new engagement of the prior GRES management team, formerly known as Office Tiger and Mortgage Ramp, will continue to provide meaningful and innovative products and services for many of the Fortune 500 clients it has served for more than a decade. Keith Gettmann and Doyle Spears, now serving as Senior Managing Directors in Covius, along with nearly 100 employees nationwide, are committed to ensuring a seamless transition, and continuing to provide customer service that is second to none.

In addition to securing Mr. Gettmann and Mr. Spears, Covius has the distinct honor of announcing that Edward Feighan will serve as the Chief Executive Officer and Joseph Little will serve as the President of the newly formed company. Mr. Feighan is a former multi-term congressman (10 years in the U.S. House of Representatives) and a successful entrepreneur with a track record of building numerous profitable companies. He is highly regarded in the government community, and in private equity, and has served at the highest levels of executive management with insurance specialty companies, including the former CEO of ProCentury.

Mr. Little is the former Chief Executive Officer of Real View Capital where he was instrumental in building a highly profitable residential mortgage acquisition platform. Prior to that, he worked for seventeen years at several top-tier Wall Street investment banks serving at the highest levels of executive management and is frequently called upon as an industry expert to advise on all facets of real estate transactions.

“Through this transaction, we have the good fortune of acquiring an industry-leading real estate advisory services company with a superior management team, each having a minimum of 20 years of relevant experience.” Mr. Little continues to say, “The real estate market has experienced profound changes in the last few years. Our clients, now more than ever, continue to come back to us as a trusted source of intelligence to navigate the new and evolving landscape. This is where our experience and trust matter the most.”

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.