CUNA News Podcast – Marquis Sponsored: Integrating Data to Deepen Member Relationships

Check out the latest CUNA News Podcast sponsored by Marquis as Dr. Tony Rizzo, Chief Marketing and Creative Officer, and Ryan Housefield, Senior Vice President of Sales, describe how credit unions that use data on the front lines can provide the engagement tools employees need to drive sales and decision-making while improving the bottom line.

Click here to listen to the podcast.

Adapting to the New Normal Featuring Marquis’ CEO, Susan R. Faulkner

 

The New Normal with Marquis CEO, Susan R. Faulkner

 

Video Transcription 

“Now we’re almost done with three-quarters through 2020. For many of us, this has been an incredibly challenging, transformative and life-changing year. In some ways, life went on as usual. We were still expected to show up for work, whether in the office or at home. Babies were born. But in other ways, it was like no other year we’ve experienced in our lifetimes.

From the corner office, to the executive C suite, to the loan officer and call center employee, 2020 has been an exceptionally tough Black Swan event year and we’re not even through it yet. The sheer amount of disruption, both good and bad, has turned all of our kitchen tables into eight-to-five desks and conference rooms, and many parents into teachers overnight.

And with summer coming to a close and students adjusting to their new remote or redefined in-person schools, the new normal is starting to feel like business as usual. Now, I don’t know what the future will be like, and we’re pretty sure that there are many parts of our society and of our economy that will never be the same again.

So the best thing that we all can do right now is to be adaptive. The strongest organizations and leaders all share the same quality: the ability to adapt to circumstances that you can’t control and focusing energy on changing and improving the things you can. We can all find opportunities to use the mindset every single day, regardless of whether you’re a marketing or compliance executive, credit union or bank, or part of Marquis.

In many ways, I think this can be a great way to set the tone for the rest of this year, and 2021.”

Mitigating Compliance Risk for Digital Marketing and Social Media

Digital marketing and social media are a must-have for every financial institution. They are invaluable tools, enabling you to reach the right person at the right time with the right message, reduce marketing costs and increase ROI. Their successful implementation can be linked to a 3-step process—data collection and analysis followed by informed action. However, to mitigate compliance risk, digital marketing and social media posts must adhere to the same fair lending and regulatory guidelines and practices as other forms of marketing.

A marketer’s dream. A compliance officer’s nightmare.

Financial institutions collect a tremendous amount of data on their customers. They know addresses, age, gender, ethnicity, marital status, financial status, credit card purchases, vehicle age … priceless data that enables precise targeting. However, certain data triggers may open the window for digital redlining and other fair lending risks if they rely on protected class definitions.

Does this mean financial institutions should shun digital marketing and all its benefits? How do we make sure our institutions are protected from compliance risk in a world where marketing relies on data filters? Let’s explore the ramifications of using targeted, digital marketing and social media in the world of banks, credit unions and regulators.

Does Digital Marketing reach everyone equally?

While the vast majority of Americans use the internet regularly, 10% of the US population is not digitally engaged. Of those, 14% are Hispanic, 15% are black and 27% are over 65 years old.1 These are all protected classes, and they occupy a digital desert; with no data coming in, not even targeted direct mail can reach them. We also have to consider the credit-invisible population, those who have not had the chance or opportunity to develop a credit score, good or bad.

If digital marketing and social media do not reach these individuals, this could be considered disparate impact and/or treatment. It pays to be overly cautious and to decide early how to reach these small, but important, populations.

The Pitfalls of Digital Marketing and Social Media

The more internet-based marketing is used to target advertising, the more likely target data may inadvertently categorize consumers by protected classes. Knowing Alice is a 65-year old Hispanic female who likes to browse fashion is great for shoes. It’s not so great for financial institutions as most of the indicators can be considered protected classes – over 65, Hispanic, female, etc.

With the help of cookies, data is collected and attached to an individual through email addresses, phone number and other personal forms of identification. Algorithms ensure Alice, who has visited numerous real estate sites, sees mortgage offers and links to relevant posts. Sounds innocent enough. But what if Alice’s data excludes (or includes) her based on gender, age or national origin? This opens financial institutions to possible compliance risk.

Compliance Risk and Digital Marketing

Banks and credit unions are increasingly engaged in digital marketing. It’s a cost-effective and powerful platform to reach customers and prospects where they are most engaged with a message that resonates. It often involves collecting real-time consumer data that can be used to create detailed profiles and data triggers for communications, such as product viewed, product bought, income and ethnicity. Triggers based on protected classes, even if it’s done unintentionally, could put your financial institution under scrutiny for fair lending risk.

Compliance Risk and Social Media

Today’s consumer wants more. They want to engage with brands that reflect their values and deliver more than targeted offers. Social media channels are where they turn. They look for meaningful communication that sets your financial institution apart from others. Insightful articles on debt consolidation, Facebook posts about employees and tweets on community involvement are just a few ways you can connect with your customers on a deeper level and reinforce brand loyalty. A strong social media presence helps set your financial institution apart, enhances existing relationships and helps attract prospects. However, the same fair lending risks arise as in digital marketing.

The Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA) provide clear guidance on what is acceptable for marketing and advertising. To ensure targeted digital marketing and social media  posts avoid the pitfalls of compliance risk, financial institutions must make sure their efforts follow all guidelines. Finding a partner with a deep understanding of the financial world can help you navigate the complexities of compliant digital marketing and social media presence.

The Solution

Marquis Compliance Professional Services can help you navigate the digital world. Marquis Compliance Professionals Services experts have a deep understanding that enables them to recognize the risk factors of targeted marketing. They can help develop policies and procedures to collect and analyze data. By implementing risk mitigation tools like demographic balance testing, back-end testing of campaign results and reviewing matching factors, Marquis’ experts can help you avoid and/or uncover fair lending risks.

Marquis’ marketing and compliance solutions were developed specifically for the financial industry. With over 30 years of experience dedicated to financial institutions of all sizes, they understand the unique dynamic between compliance and marketing. They can provide proven and effective strategies to collect, analyze and act on data. Leveraging their unique perspective can help elevate marketing efforts and mitigate risk before it becomes an issue.

CONCLUSION

Digital marketing and a strong social media presence are extremely cost-effective mediums that enable financial institutions to enrich relationships and deliver a message that resonates. Ignoring digital marketing and social media will only handicap your institution’s marketing efforts.

Partnering with Marquis and Marquis Compliance Professional Services can help improve digital marketing and social media efforts and minimize inadvertently triggering compliance risk.

FOOTNOTES:

1 Pew Research Center, Internet/Broadband Fact Sheet: 2019 https://www.pewresearch.org/internet/fact-sheet/internet-broadband/