The mortgage banking industry is at an inflection point. Originators are facing the triple whammy of declining volumes, tighter guidelines and repurchase demands. They need to differentiate in an increasingly competitive and commoditized market. Servicers, on the other hand, are reeling from an explosion in the volume of defaults and are hamstrung by antiquated systems and processes.
Meanwhile, prospective borrowers are demanding more information on services and products before choosing a mortgage bank. Many are unhappy with inadequate disclosures, poor communication or slow responses to queries; others complain about servicers because of unclear guidelines on loss-mitigation programs, delays in modification processing and a general lack of responsiveness.
With the rise of social networking, borrowers' online opinions and recommendations are influencing borrower perceptions and decision-making. Borrowers prefer to rely on a network of trusted friends, colleagues, relatives, and even unknown fellow consumers rather than the expertise of financial institutions. Hence, brand positioning takes place well before the mortgage lead generation.
This trend has given rise to the new discipline of customer relationship management called Social CRM, or SCRM — the use of social networking to engage in a conversation with the customer to provide a mutually beneficial business relationship.
Social CRM can provide originators and servicers with much-needed market intelligence, leads and insights that can help increase market share and customer satisfaction and improve processes and services. With an integrated and comprehensive Social CRM approach, mortgage banks can use social media to improve consumer perception and quality of service.
Although financial service organizations realize the business importance of SCRM, few have made it an integral part of their marketing and process-improvement efforts. The main hindrances are the lack of senior management support, inadequate metrics to measure success, and trying to do too many things at the same time. Social media campaigns may also suffer because they lack back-end support to convert opportunities into profits, or their marketing lacks punch.
A comprehensive strategy spans all aspects of social networking: creating social communities for interaction, positive communications, listening solutions, analytics and a strong back-office to convert this intelligence into action. Mortgage banks need to listen to online conversations about their products, services and brands. Data gathered from active listening needs to be analyzed and converted into intelligence that can be used to engage with customers, expand markets, improve service and deliver measurable results.
For the mortgage industry, an SCRM approach should consist of three elements.
Social community development: Mortgage banks need to create focused communities and engage with members to create positive sentiment and build trust. Communities with discussion forums, self-help groups and online chat can support various subgroups, such as distressed homeowners, builders, brokers and prospective borrowers. These sites, owned and managed by banks, are a collaboration platform for agents, brokers, loss-mitigation and servicing teams, employees and sales executives; and can help promote corporate branding and PR efforts.
Social media listening: Banks should gather feedback, questions and suggestions through listening solutions and analyze these to generate intelligence to design consumer strategies. They can listen to user content in key mortgage social networking sites to capture information on products, perceptions and services, and use business intelligence tools to formulate strategies to improve products, services and communications. Internal stakeholders can also contribute through blogging, wikis and other forms of knowledge-sharing, since the best ideas come from the grassroots level.
Program development: Having a social media presence and interacting with borrowers are not enough. An SCRM infrastructure needs to feed consumer sentiments into a strong analytics and business intelligence engine to convert raw data into opportunities and harness leads to get measurable results.
Information captured through SCRM can reveal process gaps and inefficiencies in customer service with the maximum potential for improving the customer experience. Mortgage banks may be surprised to learn that most complaints stem from a lack of communication and clarity.
In mortgage originations and servicing, positive publicity and brand image are as important as process — especially when a bank's actions are under close scrutiny by borrowers, the government, analysts and the industry.
With so much advertising noise and so many options, customer acquisition is difficult for lenders. Analyzing customer comments on social networks can help identify potential customers and provide insights into the products consumers want, which will help in creating leads, cross-selling, upselling and launching new products.
Demographic, social and behavioral shifts have implications for all businesses, especially those with high touch-points with their customers, such as mortgage banking. As the Internet becomes a critical channel for information dissemination, access and customer interaction, borrowers seek more timely information on everything from property listings to valuations, interest rates and glossary data. They want more interactive ways to learn, offer feedback on products and services and receive communication from banks.
Mortgage banks must adapt their strategies to stay competitive. They must leverage all forms of social media to their advantage and convey their value proposition in a consistent and persuasive fashion. This strategy should include tools and techniques that can convert the structured and unstructured data captured by social media into meaningful market insights.
