Gen Y and mobile loans: Are you optimized to profit?

All credit unions are looking to increase lending, but if  you want to be successful,  you need to evolve with the newer generations.  The way you made loans 10 years ago just won’t fly with Gen Y. It’s all about faster, easier access. It’s all about smartphones. It’s all about  optimizing your credit union to grow your loan portfolio! Let’s look at two key factors that will affect your loan portfolio in the coming years, Gen Y and mobile loans.

Who is Gen Y (also known as Millennials)?

•       Born between 1981 and 2000

•       Current age is 14 to 33

•       Largest consumer group in U.S. history

•       90% use the Internet

•       75% use social networking sites

       

Millennial Expectations (faster, faster, faster)

•       Embrace emerging technologies

•       Require convenience

•       Want instant gratification

In this day and age, nothing answers the call for instant gratification and technology-linked convenience like the smartphone.

Smartphones are changing everything.

How many of you check your phone for messages, email or the latest news the first thing upon waking up each morning? Well consider this: For approximately 88 million people, the first thing they do each morning is use their smartphone. In fact, 90% of 18-29 year-olds sleep with their smartphone within arm’s reach! Smartphones are a huge wave taking over our personal and business lives. They are the next wave in lending as well. 

This reliance on smartphones is dramatically changing the way credit union members conduct their financial business:

•       Branch visits average 3-4 per year

•       Internet visits average 7-10 per month

•       Mobile visits average 20-30 per month

Branch visits are down; mobile visits are way up! The shift toward mobile banking is upon us and the  number of people who buy via mobile device will increase 65% between now and 2016.     

Credit unions cannot afford to ignore the Millennials.

“Their collective buying power alone—an estimated $200 billion annually—is already noteworthy and will only increase as they mature into their peak earning and spending years,” report Jeff Fromm and Christie Garton in their book, “Marketing to Millennials: Reach the Largest and Most Influential Generation of Consumers Ever.” If you don’t offer a mobile means to access loans, you are missing out on a huge demographic: Generation Y. What  is your  credit union doing to cater to them? Mobile lending is here. Are you ready for it? Not having a mobile optimized loan application can cost you 25% of your online volumes. How are you preparing for the mobile needs and expectations of your members? What credit union products and services could/should be delivered to mobile devices?  If you have not already considered these questions,  you should!

Yvonne Sambrano

Sr. Lending Product Manager
EPL, Inc

Attracting and Retaining Gen Y Employees

By 2025, millennials (those born between 1981 and 1995) will account for 75% of the U.S. workforce.  Don’t wait until then to start planning for their arrival in your business. Take a close look at how millennials work in order to understand how to work with them.

As employees hailing from Generation Y, they have the ability to be a positive influence on the culture of a workplace based on their enthusiasm for networking and collaboration. They can assist current leaders with newly emergent challenges. They desire to join the succession pipeline for their supervisors’ positions because they have high expectations of themselves. They want to be challenged and make meaningful contributions right away. They want opportunities to use the knowledge, skills and talents they have to solve problems, innovate and lead.

Millennials have gotten a bad rap.  They are perceived as entitled, insubordinate, lazy and ungrateful.  However, the truth is that they are anything but. More than any other generation, millennials want to make a difference, and they’re willing to put in a lot of time and energy to do so. In addition, they do what their managers tell them to do more frequently than those of any other age group. 

To make better connections with millennials, keep these ten (10) tips in mind:

1. Let go of your stereotypes and focus on their positive attributes.
2. Pair them with executives who can support their careers while having millennials teach executives about new technologies.
3. Focus on their results more than where and when the job gets done.
4. Use social networks to engage them — not to just post jobs.
5. Don’t restrict Internet usage; if you block social networks, they may not want to work for you.
6. Establish internal hiring programs to give millennials — and all members of your workforce —opportunities for growth.
7. Align your company’s message to a cause to give them a sense of fulfillment at work.
8. Sit down with them and be open about the company’s health, their performance and the future of your group. They will trust you in return.
9. Millennials want to make a major impact at your company, so give them the tools, support and resources to do so.
10. Develop gamification applications to engage millennials and build your brand.

Other Takeaways:

•    #1 Complaint?  Hearing you say, “When I was your age…”
•    No news is bad news.  Feedback is essential.
•    Technology allows work and personal life to overlap.
•    Remember. They can’t imagine being as old as you are. 

Generation Y wants to keep learning and be developed incessantly.  Every single day more than 10,000 baby boomers reach the age of 65. That is going to keep happening every single day for the next 19 years. Generation Y is in the pipeline to replace them all, but they can’t prepare themselves without proper mentoring, development and succession planning.  Ask yourself and your company leadership this question: What are you/we doing to help our company prepare for the future?  The times to act is now, and keep the lines of communication open.

Cathy Hulsey

VP-Human Resources

EPL, Inc.

Keeping Regulatory Costs in Check

It’s all about risk mitigation, and one of the best ways to mitigate risk is to stay ahead of the rapidly changing regulatory environment. In doing so, you protect your CU from liability, protect its reputation and maintain member trust. But the simple process of monitoring new and changing regulations doesn’t get the job done. You have to drill down much deeper. And while reaching a detailed understanding of the requirements of a new regulation is often a very complex, collaborative, labor intensive and costly process, it’s nevertheless essential. For by assessing the new rule’s impact on your CU, you can implement the necessary internal processes and available technologies needed to comply and create a successful compliance program.

EPL, operating as an extension to your CU, provides solutions designed to minimize the seemingly endless acceleration of regulatory burden. Here’s one example. In order to provide CUs with efficient compliance solutions, EPL has made a significant investment in a flexible hardware and software foundation upon which to build its compliance solutions. As a core processor and provider of software, we ensure that the system maximizes automation and minimizes the manual effort necessary to comply. Well before a new regulation or rule takes effect, our goal is to seamlessly integrate an intuitive solution into the existing software suite via customer and internal collaboration,.

The technology alone, however, is not the end all to an effective compliance program. Your CU should have in place documented compliance policies, documented procedures for identifying new and changed regulations, processes for staff and volunteer training, and a process for monitoring operations for compliance and rectifying any issues noted. 

Connecting with EPL’s compliance resources and together developing solutions to complex compliance issues bodes well in minimizing the stress of new regulation and the overall cost of compliance.          

Staying ahead of requirements – Low cost resources:

CUNA and NAFCU, and your League

                  Security – (Graham, Leach, Bliley)

                  EFT Network Rules

                  ACH - NACHA

                  NCUA – Has recently provided links to resources

                  CFPB

                  FRB

                  FINCen

                 

John Freeman
EPL
SVP Finance and Compliance

Do you have the e-access features all members want?

What do members expect with electronic access to their credit union? Well, everything of course.  It’s all about banking that’s faster, smarter, easier. Members expect instant access to all their account information.  They expect to be able to do anything and everything electronically that they can do in the branch, and they don’t want to go through lots of steps to access their accounts. Most importantly, members expect that all that they do electronically be safe and secure. 

Here’s a quick breakdown of the basic e-access features that consumers expect:

• High Level of Security

–      Ability to save Trusted Devices

–      Secure delivery of account data

• Budgeting Tools

–      Built-in, seamless budget tools

–      Download capability to Quicken and Mint

• Quick Transfers

–      Ability to transfer funds with very few clicks and touch points

• Member-to-Member Transfers

–      Ability to set up a transfer to another member’s account without requiring account ownership

• Person-to-Person Payments

–      Ability to send money to someone at another financial institution

• Account Alerts

–      Daily balance alert, transaction alerts, account change alerts (e-mail addresses, phone numbers, etc.)

Which brings us to mobile.

Mobile users expect to have basic account access: balances, transaction history, payoff, terms, rates, tax info, and to be able to transfer between accounts. Beyond that, mobile users are starting to expect the same access as they would get on their PC, only on their smartphones:

• Access to Bill Pay
• Access to Check Images
• Open New Accounts
• Access to e-statements 

In addition to those basics, here are other mobile features members expect:

• Ease of use and fewer key strokes

–      Quick transfers most important with mobile

–      Using phone features

·       Shake for balance refresh

·       Slide bar to move between screens

·       GPS to aid with branch, ATM, and shared branch Locations

·       Camera for remote deposit capture

• Push Notifications – Through APPs, push notifications can be used to alert on most anything, including CU news, maintenance, and account data.

• Balance Without Login – Quickly see balances without going through a full login
• Hands-Free Voice Commands
• Ease of access to credit union

–      Click to call

–      Live Chat

–      Texting

–      Set up appointments

• Digital Storage\Lock Box
• Mixing in Social Media
• Passcode\Touch ID integration – Straight login can take several steps; slim that down to Passcode or Touch ID for key items such as balance inquiries and transfers

• Mobile Wallet

• Access to ALL accounts offered by the Credit Union, including Credit Card Administration

–      Card transaction alerts

–      Monitor card balances and transaction history

–      Allow the member set controls around their lifestyle

Electronic Channels: the knowledge pipeline

Along with the member expectations, the credit union is also expecting to use electronic channels to better understand its members and to promote itself through electronic channels to these members.

• Credit Union Staff

–      Use information gathered to aid in getting to know your members

·       Understand where and how they are accessing the credit union

·       Use the information to educate and promote the credit union to the member

• Sales and Marketing in the Apps

–      Informative, effective, but not Intrusive

–      Not just promote, but allow action

Whether it’s via your web site or their smartphones, members expect robust e-access to make daily banking smarter, faster and easier. The more you can meet these expectations, while ensuring the highest levels of security, the more deeply you’ll connect with your members.

David McCullough

Sr. Product Manager