Embrace Real-Time Data, Multiple Channels for Lending Success
CUs have more information than most businesses, but they often fail to capitalize on it.
Data analysis is essential to many businesses, but it often focuses on a single purpose.
Credit bureaus, for instance, collect credit data to report creditworthiness. Retailers use sales data to facilitate purchasing and merchandising decisions.
Credit unions have an advantage in that they have more information than other retailers, but they often fail to use that advantage, says John Best, chief technology officer for Wescom Credit Union. He points to loan applications as antiquated and burdensome as an example.
“We already have most of the data we need,” he says. “So why do we make members fill out a form that includes their name, address, Social Security number and other data we already have?”
Wescom leverages numerous sources of data to support growth and member engagement, including:
The challenge is to harvest the data to identify cross-sell opportunities and present offers, says Best, who advises using “early delinquency predictors to modify underwriting criteria and retain members.”
Data analytics identifies members with non-Westcom loans and determines basic creditworthiness. This data can be used to determine interest rates and loan preapprovals, and is provided to members via an outbound calling script, Best says.
This inserts the credit union into the beginning of the car-buying process. “Using this data correctly allows Wescom to make specific, relevant loan offers to members,” he says. “Real time is essential as data becomes stale quickly—offers must be relevant and timely.
“Wouldn’t it be great to know,” Best continues, “when Ford Motor Credit has pulled a credit report on your member? Integrating products like DataMyx to notify you when members are loan shopping allows you to intervene. When Ford pulls a credit report, you could send a text to the member with current auto loan rates, a ‘click here to apply’ button, or a preapproval for a new car loan.”
That same offer can be made in multiple channels in a slightly different context—via mobile, for example, with a phone number members can call for more information if desired. That same loan offer can be made via the call center with more detail, and the representative can move the process further.
To prevent sales fatigue, members can opt out at any point, which stops offers from appearing on other channels. So if a member stops an offer in the mobile channel, the same offer will not be presented via the call center or website.
Reuse good ideas
Often when credit unions find a good idea, they’ll mine it once and forget it, says Best. He recalls working as a school librarian in the 1990s and thinking his paycheck would continue over the summer. When his paychecks stopped but his loan payments didn’t, Best called Suncoast Schools Federal Credit Union.
“They offered skip-a-pay since I worked for the school system and I was eligible,” he says. “It was a lifesaver for me—a win for the member and the credit union. You can charge $25 for it. We should be using skip-a-pay permanently.”
Best suggests using Skype to connect with young adult members who are reluctant to visit branches and yet need complex products such as student loans. “Instead of talking to a few people a day [in the branch], loan officers could talk to 100 via Skype.”
Lending success in the mobile age, Best says, involves taking several steps:
Best takes inspiration from the movie “Inception,” which portrays a world where the technology exists to place thoughts in people’s minds.
“We need to put thoughts in members’ minds,” he says, that they should come to the credit union first for auto loans or mortgages.
Best addressed the CUNA Lending Council’s annual conference in Miami Beach.