E-mail Can Be Powerful Customer Relationship Tool

Even as mortgage lenders spend millions on complicated loan origination and servicing technology to make their operations run better, cheaper and faster, the killer application may already be in their arsenals: e-mail.

According to a roundtable of mortgage industry experts who spoke at Thomson's recent 4th Annual Mortgage EC Conference here, e-mail has awesome potential if the industry is careful about how it is used.

The power comes from using e-mail as a tool to disseminate information to your existing customers, says ABN Amro senior vice president Garth Graham.

"When you can expand a relationship by e-mailing them information they want, the results can be dramatic," he told the audience.

But he cautioned lenders not to spam their customers, but rather to use opt-in technology to allow borrowers to determine what information they will receive.

Ed Jones, CEO of ARC Systems, Austin, Texas, agreed that it was important not to abuse e-mail.

"E-mail will continue to be a viable way to communicate with and sell to people," Mr. Jones said. But if lenders overuse it or violate the privacy of their customers, it could do more harm than good, he said.

"Technology will be developed to help some folks limit that," he said.

The ability of the mortgage industry to regulate itself in regard to the use of e-mail for marketing purposes was vital if lenders want to avoid government intervention.

"If we don't self regulate ... we might be legislated to death," Mr. Jones said.

But according to Emmanuel Obiorah, online channel executive, consumer real estate for Bank of America, there are other risks to using e-mail for sending new offers to existing customers.

"The dangers in e-mail have brand considerations," he told the audience. "You cannot just send e-mails out to banking customers."

The concern, he said, was that opening up e-mail access to customers without corporate control could damage the expensive branding work the company has already done to turn prospects into customers in the first place.

While he agreed that it was a viable tool for the institution, he said that e-mail must be strictly controlled in its use.

Copyright c 2003 Thomson Media. All Rights Reserved.

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