Using the Internet as a marketing/distribution channel Julian Wells Head of Marketing, Mortgages plc Mortgage Business Expo 16-17 November 2005 Agenda Introduction The mortgage market ● Strategic importance of the Internet ● Financial Promotions and online marketing ● Promoting mortgages online Summary 1 Strategic importance of the Internet Strategic importance of the internet Mortgage market Well known arguments in favour of being online… ● Email is instant and cost effective (no printing and posting) ● Website is open all hours - your 24 hour salesperson The mortgage industry has been slow to adapt, but intermediaries and product providers are now advancing Popularity and usage set to continue to grow 3 Strategic importance of the internet Mortgage market You now need to be online Some providers only accepting electronic forms Online exclusive products and services Advantages of being on the Internet from efficiency / service perspective Customer expectation has grown ● Consumers like to feel they are using most up to date technology to find their mortgage 4 Strategic importance of the internet Mortgage market The Internet & the FSA aren’t an obvious match! Internet best practice says: ● The fewer clicks the user has to make, the better − Because the online consumer is lazy and impatient − Because they don’t have time to read smallprint The FSA says: ● You must present all the information required by the FSA on your website and emails − Because your site should be clear, fair, and not misleading − Because disclosure is important online 5 Financial Promotions The theory & the reality The Internet Financial Promotions The theory Qualifying Credit Promotions Includes: Brochures, adverts, websites, telesales, mailshots, emails, presentations etc etc.. All promotions must be approved by an FSA authorised firm Must be “clear, fair, and not misleading” and “balanced” Any statements/claims must be backed up with evidence ● E.g. ‘We will save you money on your mortgage’ Applies to virtually all marketing direct to the public 7 Financial Promotions The theory Qualifying Credit Promotions If you mention product rates, you must quote an APR For all non conforming adverts, you must quote a representative APR There are also a number of risk warnings required on non-conforming and debt consolidation promotions 8 Financial Promotions in Mortgages How are we doing? 251 mortgage adverts reviewed in April/May 2005 in editions of consumer mortgage press ● Approximately 25% potentially non-compliant promotions A further 75 reviewed in September ● Approximately 31% potentially non-compliant promotions ● New problems being found in recent promotions ● Due prominence is a common fault Non-conforming market is biggest culprit Source: Mortgages plc research findings 9 Financial Promotions in Mortgages An increasingly high profile topic in the industry 10 Financial Promotions in Mortgages Mortgage Introducer is calling for an industry standard 11 Financial Promotions in Mortgages Mortgages plc has published a marketing guide for mortgage intermediaries Available free of charge Downloadable from our website at www.mortgagesplc.com Free copies available on the Mortgages plc stand today 12 How firms are promoting mortgages online Promoting mortgages online Online marketing Lead generation tends to be the key objective Popular techniques include: ● Search engine marketing ● Online advertising ● Viral marketing Established in prime market, increasingly popular in the non-conforming sector Relevance is the key to success! 14 Examples in a regulated market Online lead generation An effective way to generate leads Need to ensure websites are compliant in the same way adverts are Any online data capture needs to be carefully reviewed to ensure it can not be viewed as giving advice 15 Promoting mortgages online Be careful not to give advice This will undoubtedly become a hot topic A website is giving advice as soon as it uses your personal information to promote a product to you ● It must then follow full sales process (IDD, KFI…) Is your interactive website crossing the line of promoting/advising?? 16 Promoting mortgages online Search engine marketing Techniques: ● Natural searches ● Sponsored links ● Pay per click Enables you to target relevant consumers 17 Promoting mortgages online Online advertising There are many opportunities to promote your services online Choose carefully if you opt for this route Aim to negotiate deals based on guaranteed returns If it sounds too good to be true – it probably is! 18 Promoting mortgages online Online advertising – disclosure is important Can only click thru to a fully compliant entry page 19 Viral Marketing How does this work in financial services? 20 Viral Marketing Referral 21 Promoting mortgages online Lessons can be learnt from offline Ongoing effectiveness of small adverts is under question Taking a simple approach to smaller adverts is one solution Keeping online banner adverts very basic is a wise approach 22 Promoting mortgages online Lessons can be learnt from offline Advertorial Allows you to meet detailed compliance requirements and get your message across Your website will almost certainly need to carry more detail than ever before But… the FSA has concerns about case study style advertising ● Can be deemed misleading 23 Strategies in a regulated market Other approaches Some firms have used humour to embrace compliance But… due prominence works both ways!! 24 Promoting mortgages online Online compliance tips 3 key things to remember: Take a ‘zero-click’ approach to online compliance Ensure you have a sign off process and record keeping process in line with your offline one Carefully review any links to and from your website to ensure they are compliant 25 Summary FSA is taking a growing interest in Financial Promotions Opt for a simple or detailed approach – depending on your objectives and message Spend some time surfing the Internet for examples of good and bad practice and new ideas However you promote yourself on the Internet, make sure you are compliant! 26 Thank you for listening! Any questions?
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