news.cuna.org/articles/112352-simplicity-convenience-rule-in-auto-lending
Lending
From left: Sundeep Kapur, Kelli Blair, and Brian Betza discuss digital lending.

Simplicity, convenience rule in auto lending

Members have many more opportunities to take their business elsewhere.

May 25, 2017

Filling out reams of complicated paperwork is not the way your loan department should operate. Instead, find a simple solution.

“The consumer wants simplicity and convenience when they’re getting a loan,” says Sundeep Kapur, an educator who works with organizations, including credit unions, on consumer engagement.

Kapur and two credit union executives spoke about how to succeed in digital lending during a breakout session at CU Direct’s Drive 17 Conference Wednesday in Las Vegas.

With small- to mid-sized financial institutions losing 14% to 53% of their loans to fintech, insurance companies, investment firms, credit card companies, larger financial institutions, and payday lenders, Kapur says it’s crucial to examine lending practices. Make sure you’re making it simple, using all available delivery channels, and nurturing relationships with members to continue securing loans, Kapur says.

“Members have many more opportunities to take their business elsewhere now,” says Kelli Blair, senior vice president and chief development officer at Truity Credit Union in Bartlesville, Okla.

When examining your digital lending practices, consider these tips on making it simple and convenient for members:

  • Simplify the application and fulfillment process. Members don’t want to worry about making mistakes and forgetting to input information, both of which would cause delays.
     
  • Ensure quick decisions. This helps drive loans. “You have to be there for your members and be there when they want you to be there,” says Brian Betza, associate vice president of credit services at Pennsylvania State Employees Credit Union in Harrisburg, Pa.
     
  • Convince then convert. Follow up with members obtained via indirect lending. Focus on products such as credit cards and loans in your attempts to convert them to full membership. “It’s about planting a seed,” Blair says. “It’s making sure they understand they’re part of the credit union and you’re building a relationship.”
     
  • Find your niche. Determine what sets your credit union apart from other financial institutions and define a clear value proposition. “Contact the dealers and make sure they know what you bring to them,” Betza says. This will remind dealerships of how important your credit union is, and it keeps your name in front of them.
     
  • Automate the decision-making process. This allows decisions to be made quicker. Members don’t want to have to wait to find out if they’ve been approved for a loan and dealers don’t want to wait a long time to find out if a lender will take on a loan. At PSECU, 40% of loan applications are auto-approved, Betza says, “it’s a good experience for a member to see the automatic approval come in.”