More than half of loan applications still come in via the branch, but the shift to digital is becoming especially pronounced at credit unions with more than $2 billion in assets.
That’s according to results from an exclusive CUNA Lending Council Benchmark Study that examines consumer and mortgage lending productivity, cross-selling, technology use, and other measures.
Cornerstone Advisors led a discussion with several panelists whose credit unions participated in the study Monday at the 2018 CUNA Lending Council Conference in Anaheim, Calif.
During the discussion, participants discussed some of their strategies for success:
Jim Block, chief lending officer, BCU, Vernon Hills, Ill.: “We’ve seen growth through all channels, but we’re aggressively growing our branches. Our branch network focuses on loan growth, and that’s what we hire and train for.
“With indirect lending, we’re proactive in reaching out to new members. We educate them about credit unions, try to meet their needs, and identify the right products for members. We want to establish long-term relationships with indirect members, and lay the groundwork for larger loans.”
Jeremy Pinard, vice president of lending, Alliant Credit Union, Chicago: “We closed all but two branches, and we’re basically 100% digital. We’re completely focused on the online experience. The member experience can have no friction in the online channel. If there is, people will fall out. We’ve used journey mapping to understand the pitfalls that exist. It tells you a lot about where you need to get better. If you’re not doing this, you’ll be behind the times.”
Marty Pell, senior vice president/chief lending officer, Coastal Federal Credit Union, Raleigh, N.C.: “We’ve been a leader in the use of PTMs [personal teller machines]. This has freed up branch manager resources. In the past, as much as 60% of manager time was related to the teller line. Now, branch managers focus 100% of their time on serving members as they come into the branches. We’ve seen a huge increase in productivity since implementing this. Member-facing staff now focus on meeting member needs and delivering financial products.”
Mike Long, chief credit officer, UW Credit Union, Madison, Wis.: “We’re a university credit union, and we sign up 8,000 to 10,000 new students each year. Most get credit cards. We keep them engaged throughout the experience, and then convert them to an adult card—a platinum rewards card instead of a card with a $1,000 limit. You need to build cross-selling into the process, whether it’s online or in the branch.
“Our indirect lending program has exploded. We do more than 1,500 indirect loans each month. Speed is very important. Our service level for dealers is 10 minutes for a decision. We currently operate at seven minutes, and provide same-day funding. We get a lot of checking accounts out of these loans because borrowers get a discount on the loan when they open a checking account with us.”
Michelle Goeppner, director of credit product strategy, Alliant Credit Union: “We launched a new credit card product, and we craft new offers in a highly competitive market. The timing and channel matter. We look at members who have balances with other providers, and try to do balance transfers. We incent our frontline to cross-sell, bundle products, and try to capitalize on anti-bank sentiment. People are still skeptical of banks.
“We want to incent the purchase of big-ticket items to get revolving balances. We also do competitive assessments to see what other providers are charging: Can we push up our fees a bit and still be lower than everyone else?”
Ray Lindley, chief lending officer, Elevations Credit Union, Boulder, Colo.: “We got into the mortgage business in 2011 and focused on originations, not refinance. So we had some luck in timing. Many loans begin with people who started with Quicken and were promised things Quicken couldn’t deliver. Fulfilling the loan on the purchase side is the most important thing.”
The Benchmark Study is available to CUNA Lending Council members.
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