Loan officers have watched mortgage rates drop, smiling all the while. In August, they fell below 4 percent for the first time in three years, leading a rush of buyers to lock in low rates for long-term loans. Since last year, the rate of refinancing has tripled and home purchases are up 12 percent. But as consumers navigate originations and refinances, they need resources to guide them.
Their first port of call? Online resources such as social media. And if loan officers fail to meet them there, they’ll find someone else—like an all-digital lender.
The digital sphere is bringing unprecedented competition to mortgage lending. In fact, one industry report predicted digital lending would reach $122 billion by next year—a tenfold increase since 2014. Not just Millennials flock to digital lenders, either. In 2017, Quicken Loans reported that 57 percent of first-time buyers who used Rocket Mortgage, Quicken’s online-only platform, were over the age of 35.
As low rates send buyers of all ages on the hunt for mortgage loan information, lenders and loan officers stand to gain more prospects—but only if they stand out in a digital world.
Social media is already a must for banks; 42 percent of Americans access their bank accounts via the internet, 30 percent on mobile, and only 18 percent at bank branches. Fewer people visit their local branches to open savings accounts, make deposits or meet with loan officers.
While this may seem like bad news for your bank, it actually creates a valuable opportunity. Maybe people visit physical banks less, but they’re more engaged online than ever. According to Pew Research, 74 percent of Facebook users check in every day, and 42 percent of Twitter users scroll daily. Forget foot traffic: Your loan officers have a lot to gain from a strategic shift towards relationship building via social media.
If your financial institution wants to capitalize on falling rates, you must first revamp your social strategy. Start with these steps:
1. Value add beyond another ad. Seventy-six percent of consumers say social media posts from regular people carry more credibility than the branded content in their feeds. That means if your loan officers share more personal information than branded material, customers are more likely to trust them.
Encourage loan officers and other bank employees to share not just news and updates about the industry but also personal stories and successes related to your financial institution (a “brand ambassadors” tactic as covered in this BAI Banking Strategies podcast). Community-centered content is even more compelling. Photos and stories about bank-sponsored events can help strengthen ties to the community your loan officers serve.
2. Build credibility via content. Frankly, lending confuses the average customer. Before they trust a loan officer or financial institution, consumers will most likely research through Google or social media. But most won’t find out all they need to know—and may even walk away with a few misconceptions. Case in point: Most consumers believe qualifying for a loan is much more difficult than it actually is.
This presents loan officers a huge opportunity to educate consumers and build trust. They can share content on their social pages that addresses consumer concerns and establishes them as valuable expert resources. For example, a post by a loan officer might teach an interested buyer that the minimum FICO score needed to quality for a loan is lower than that consumer expected. This might prompt further questions that move the potential buyer to contact that loan officer for the answers.
3. Make compliance uncomplicated. Loan rates won’t remain favorable forever so there’s urgency to get the word out through the right social strategy. But don’t let that urgency cause you to drop the ball on compliance. Your institution’s social media engagement must follow the Financial Industry Regulatory Authority’s electronic communications rules—the same ones that resulted in $8.3 million in fines in 2017.
The best way to ensure compliance across your financial institution is to bake it into your culture. Teach employees your brand messaging; train continuously on your social media policy; adopt social media software that monitors and archives every post and comment, to track compliance in real time.
If your bank doesn’t already use social media to connect with potential and current customers, start now. Give your employees the tools and structure to be human on social media even as you implement safeguards to keep their interactions compliant and focused. Finally, reach and engage customers where they live online. Soon enough, your loan officers won’t be the only ones smiling.
Doug Wilberis the CEO of Gremlin Social, a company that applies ABA-endorsed compliance tools while maximizing social marketing campaigns, guiding strategies and monitoring return on investments.