Tuesday, October 11, 2011

10/11/2011 - What Banks and Lenders Know About You From Social Media


Many Americans may be unaware that their social mediaconversations and posts are providing banks and lenders with a treasure trove of information. In fact, a growing number of banks and lenders are currently building a data repository – collecting, storing and analyzing data – in the hopes that one day it could help them determine your potential credit risk and also tailor marketing directly to you.

The earliest we’ll see banks and lenders begin to act is five years down the road, once they’ve had time to evaluate and correlate specific social media behaviors to actual credit risks. For example, tweeting about walking away from your home may translate as an indicator that you may be delinquent on a future loan. Now banks are doing the math to determine whether these kinds of comments or tweets actually prove true down the road.

Bottom line, if banks and lenders can prove that using social media data as a business tool is successful in assessing behavioral patterns and preventing future losses, then why wouldn’t they?

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