Should lenders take to social media to find customers?

Lenders & Banks on Social Media

As the economy recovers, banks are increasingly interested in finding new customers to take out loans. How can they ensure that they find creditworthy borrowers?

Bank Tech contributor Jonathan Camhi argues that the answer is actually quite simple. Banks, he argues, must reach out to Millenials who have graduated from college and are beginning their careers. The best way to get their attention is to go where they spend their time, which means using social media.

Millenials may be more receptive to this idea that many people think. Camhi cites a survey titled, “A Critical Balancing Act: U.S. Retail Banking in the Digital Era,” that found that 40 percent of banking customers aged 18-29 say that they are “very active” social media users. Since loans are often complex, this is a good place to explain the ins and outs.

Camhi then quotes one high-ranking industry insider, who says, “The transaction process takes a lot longer with lending. There’s more info to share; it’s a more engaged audience. Social media can give you an interesting opportunity to differentiate from your competition by making your products easier to understand.”

The reason why it may be crucial that banks begin to embrace social media is that consumers are already doing more independent research than they used to. Banks are going to need a larger online presence in order to draw these people toward what they have to offer.

Of course, there are risks associated with offering loans to younger individuals with little in the way of credit histories. That’s why banks should use risk management software to identify the best customers.

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