Lending in the Not-Too-Distant Future

See what the member of the future, Olivia, will expect from CUs.

July 25, 2011

I’ve always loved science fiction. I watched all the Star Trek shows and movies, marveling at the predictions of what the world would look like 300 years in the future.

Interestingly, while some of the predictions are still in the realm of science fiction, many have already become commonplace. With that in mind, I’m going to predict the future for consumer lending.

My credit union member of the future—let’s call her Olivia—will expect to use technology for most everything she does. While she will have a communication device, it’s not a phone. The concept of a phone is as obsolete as the telegraph is today.

Subscribe to Credit Union MagazineThis communications device allows her to be in contact with friends, family, and others instantaneously. Rather than text, instant message, tweet, or post on Facebook, she tells the device what she wants to communicate and to whom.

The device then makes sure the communication gets to the appropriate person in the format that either has been specified, or that’s in the preferences profile of the people to whom she wishes to communicate.

Olivia doesn’t need to check to see if she has received any communications from others. The device prioritizes messages and communications based on criteria she has given it.

Some messages are transmitted to her immediately while others are kept for her to review as she wishes. She uses this device to keep track of things such as groceries, and transmits that information to merchants so they’ll know what she needs and when she needs it.

The merchants will make sure Olivia’s items are delivered or ready for pick up based on her instructions.

When Olivia has financial services needs, she will expect her credit union to provide the same sort of service her grocer provides. When she needs to borrow money, the device will communicate with pre-selected financial institutions to let them know what her need is.

Olivia will expect that the institutions will be able to provide her with the information necessary to choose the product that best meets her needs. She will require them to be ready to provide her loan in a number of ways, depending on what’s most convenient for her—electronically, in person, or in any other way she requires.

It is likely her preferences will change from one transaction to the next. Just as her grocer will need to be ready to either deliver her groceries or have her pick them up, the credit union will need to meet her needs in her timeframe to make a loan to her.

While it’s comforting for lending professionals to feel they have some control over how they make loans available to borrowers right now, it’s a buyer’s market both in the short- and long-term. Your members increasingly expect you to lend them money how and when they want it delivered, not caring what is best or easiest for you.

The scenario I paint isn’t so far-fetched. Just like some of Star Trek’s predictions came true in a short time period, this world of instantaneous communications and response isn’t far in the future.

This is the world my teenage daughter, Olivia, lives in now. How are you preparing to serve her world?

BILL KLEWIN is the director of regulatory compliance at CUNA Mutual Group, Madison, Wis.