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Harnessing the Power of Social Media in the Credit Life Cycle

Social networking platforms have been adopted by a broad array of demographic groups and these online communities represent enormous opportunities for businesses—including financial institutions. Organizations can approach social media in the following categories: active listening, established presence, targeted advertising, data mining and research and direct communication. These categories can each be implemented across the credit life cycle. While there are many options an organization can pursue, the approach must be structured and provide a seamless, unified experience for the customer.

Building profitable relationships with customers through social connections can be done through a seemingly limitless array of interactions. Some applications for integration of social media strategies in the credit life cycle include:

  • Prospecting – “Check-in” features allow for understanding consumer behaviors.
  • Acquisition – Linking across social media platforms can assist in verification.
  • Underwriting – The wealth of online information leads to the potential to harvest historical data about applicants
  • Customer Service – Social media is a useful channel for updating customers and gathering information through surveys.
  • Fraud – Location-based services could factor into a new set of fraud rules.
  • Line Management – Personal milestones or life changes frequently appear as shared content, allowing institutions to offer increases or new products.
  • Collections and Recovery – Online feedback provides an opportunity to monitor and respond to compliance or regulatory concerns.

While there are many benefits to socially integrated strategies, there are also risks. While working through social media, it is important to keep a focus on maintaining brand identity, investing properly in talent and infrastructure and acting conservatively where regulations may be applicable.

For more detail around this topic, a PDF version of the full white paper is available for download.

Category: Servicing