Want to Succeed in the Future? Establish High-Value Loan Relationships

Consumers shopping for loans will demand convenience above all.

December 7, 2015

Shopping behaviors differ among loan categories, Filene research reveals. But on average, less than half of members compare loans from different institutions.

Credit unions will rely on member relationships to steer the ship into the next decade, but the tide is turning—and fast. Today’s low-rate environment could persist for years.

That’s why more consumers shopping for loans will demand convenience above all.

In the future, existing member relationships won’t be enough to increase your share of high-value loans such as mortgages. In fact, a study of key attributes behind members’ loan preferences reveals low rates, competitive fees, and the ease and speed of the application process each play a significant role, according to Filene’s “Linking Member Satisfaction to Loan Decisions.”

For credit unions, low-value loans always have been a comfortable sell. Staying relevant in the oncoming decade will require a better ability to capture first mortgages and home equity lines of credit.

Unless credit unions do a better job making members aware of CUs’ ability to offer competitive mortgages, they run the risk of losing high-value loans to banks.

But you can implement many small-scale changes, such as:
Offering better member-fitting loan types;
Creating clearer marketing campaigns; and
Building stronger relationships with mortgage brokers.

If members’ perception that banks can offer better-fitting mortgage solutions is accurate, then credit unions must broaden their product offerings or redouble marketing efforts.

Consumers are more informed than ever in this hyper-connected, digital world. Of those members who conduct research prior to applying for a mortgage, 43% spend more than two weeks evaluating information, Filene research indicates.

This will remain the standard as access to tools and information proliferates, empowering more consumers to take the driver’s seat in determining the best financial products to meet their needs.

BEN ROGERS is Filene Research Institute’s senior research director.