Social media is a powerful tool, but for many credit unions it's little more than a once-in-a-while chore on a long list of other work that needs to be done, and it doesn't seem to generate much in the way of revenue.
Not so for the Oshkosh, Wis.-based Verve Credit Union, which has $766 million in assets and 56,000 members. In 2015, Verve added 175 new loans and $2.5 million to its loan portfolio that it said came directly from its use of social media. It also generated additional noninterest income from 52 GAP policies and 68 debt cancellation policies that came through social media, according to the credit union.
Climbing the Social Ladder
The wins are a reflection of the growing revenue influence social media has for credit unions. Seventy percent of searches for new financial institutions begin online and through social media, for example, according to Filene.
For Verve, the key was a social media application named Yak! Tracker that helps move potential members and borrowers through the purchase funnel. Yak! Tracker is operated by a CUSO formed in 2011 called Chatter Yak, which is co-owned by Verve and specializes in managing social media for credit unions and community banks.
The application generates leads by helping credit unions conduct sweepstakes, trivia and contests via social media. Entrants complete custom questionnaires that analyze their answers in real-time and serve up special loan offers, products or tools to keep them moving down the purchase channel. Coded links track lead forms and other activity that comes in through those platforms, so the credit union knows exactly where potential members and borrowers are seeing its offers.
"We don't want to 'spray and pray' our messaging," Bryce Roth, Verve's former director of cooperative outreach and current co-founder and president of Chatter Yak, said. "Instead of just saying, 'Hey, good luck winning the $100,' what we then do is – because they've indicated on their own will that they have, say, a loan somewhere else and they want to save money by bringing it over, or they're at least interested in it – we then can put a loan calculator in front of them that has the credit union's rate," he explained.
"Then they can see exactly, by picking what their credit score is, the term they want and how much they'd like to borrow, and we can show them right then and there what their auto loan payment could be with us. At that same time, someone in the credit union then gets an email with all that person's information they entered and they can call them right away," he said.
Social Pressures
Verve's heft in the social media world is substantial. The credit union now ranks No. 54 on Financial Brand's list of the 100 most influential credit unions on social media, pulling in more than 13,000 Facebook likes, 834 Twitter followers and almost 196,000 views on YouTube. That gives it more social media sway than some other credit unions on the list that are several times Verve's size – behemoths such as $2.4 billion El Paso-based GECU, which has 348,000 members and ranked 61st on the list; the Bethpage, N.Y.-based Bethpage Federal Credit Union, which has almost $7 billion in assets and 293,000 members and ranked 73rd; and even the $7.3 billion, Universal City, Texas-based Randolph-Brooks Federal Credit Union, which has 657,000 members and ranked 55th, for example.
But Roth said credit unions should be aware that social media is more than just tweets and posts – it carries compliance obligations that warrant careful oversight.
Social media is a form of advertising when used to attract public attention or patronage to a product or business, according to the FFIEC and Federal Reserve, and that means tweets, posts, pins and status updates have to comply with an alphabet soup of regulations such as TISA, UDAP, ECOA, TILA, RESPA and FDCPA.
"I can't tell you how many times I see people putting rates and just saying, 'Hey, this is a great deal,' and that's it. It's scary," Roth said. "If you're going to mention a rate or a trigger term, you have to link directly to where the disclosures are. Not to your homepage. They have to get to the website. They have to get to the fine print."
That's one reason things like mortgages can be a little tricky, according to Roth.
"We try not to talk too much about mortgages at all, really, on social," he said. "No one really ever does mortgage billboards either. The reason they don't is if you put a rate on there, the next day it's different anyhow. We try to stay away from that."
According to FFIEC supervisory guidance, credit unions should have risk management programs that identify, monitor and control the risks related to social media. And even if a credit union doesn't use social media, it should still have a plan for addressing negative comments and complaints that arise on social media.
"On any platform, if someone says something discouraging about your credit union, and you don't respond to it or try to resolve the issue, that could be reputation risk," Roth cautioned.
Sometimes credit unions go too far. One of Roth's clients once shut down all the comments on its Facebook page, citing 'too much negativity,'" he said.
"Essentially, they just made social not social. No one can talk to them, but they can talk. That's a big problem," he said.
Nonetheless, Roth said, the payoffs from social media can be substantial – and very tangible, as appears to be the case for Verve.
"They're closing loans. They're not doing it because it's not working, they're doing it because their clients are coming to them," he said. "That's the exact opposite of what I hear so much when I start working with a credit union. They're like, 'Well, we're so worried about compliance and how we can do all this stuff. We just might not even do this at all.' And you know what Verve says? They said, 'Well no, let's just figure out how we can do it, not why we can't.'"
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