Mobile Lending Sparks Youth Movement
The average age of the Smartphone Loan user is 29.
As more consumers use mobile devices to access the Internet, it follows that more consumers will use these gadgets to obtain loans, says John Putman, CUNA Mutual Group’s director of lending business systems.
As a result, “Credit unions need to make sure the usability of the loan application is suitable to that device,” he says. “You should access your credit union’s online loan application from a smartphone device to see how user-friendly it is.”
This is especially important for credit unions seeking to attract younger members. While the average age of a credit union member is 47, users of CUNA Mutual’s Smartphone Loan technology have an average age of 29, says Putman (below).
“Credit unions that want to attract younger members need to pay attention to the technology those members prefer,” he says. “Very often, it’s mobile.”
The Smartphone Loan technology lets members apply for loans anywhere they can take their smartphones. The technology is a mobile version of CUNA Mutual’s loanliner.com product, which nearly 600 credit unions use.
When a member applies for a loan with a smartphone, the application data is sent to the credit union’s loan origination system for an underwriting decision. A few seconds later, the member receives a response and the application appears in the credit union’s loan queue.
Loans made through the mobile channel average about $8,000, typically for used cars. That compares to $11,000 for loans made via loanliner.com, Putman says. Today, more than 500 credit unions have received loan applications via Smartphone Loan for $71 million in loans.
Mobile application completion rates are “well above 50%,” he adds, compared to 40% to 50% for all Internet loan applications. Putman attributes this to the Smartphone Loan application’s “simpler design, which means members can make it through without too much difficulty.”
Putman says CUNA Mutual will make a significant investment in technology in 2012 to take advantage of device hardware, namely the camera and global positioning systems. “This is a channel that can generate significant income if the credit union does it correctly.”