7 ways to help increase loans

Remember when lending used to be easy?  Members would dress in their Sunday best, come into the branch to make a good impression, and practically beg you for a loan? Yeah, we don’t remember that either. But lending has evolved drastically in the last few years.  The days of in-person apps are going away.

Today, when members ask you for money, they’re quite often in their jammies, not their Sunday best. It’s all about convenience and speed, and members accessing your services on their time! Sure members might come into your branch to apply for a loan, but they’re more likely to use the following:

• Call Center
• Online  (24/7)
• Mobile (24/7)
• Tablet   (24/7) 

At the heart of the appeal of all these channels is the member’s desire for a quick response and immediacy: instant decisions, e-signature capability, and a fast turn-around (closing a loan in minutes rather than in days). So, if this is today’s playing field, here are a few options to explore that can help you increase loans and stay in the game:

1. Go Mobile for Loans

• Go out to your SEG groups or a partner dealer.
• Enable members to open new accounts remotely.
• Take loan applications remotely and provide an instant decision.
• With an iPad, the member can sign their documents with their finger!

2. Use Social Media to Get the Word Out!

• Market your products and services letting your members know you have what they need.
• Create contests and have fun!

3. Educate your Members

Before your members decide to purchase a car, they do some research.

• Be relevant during the research process by providing them the tools and the tips they are looking for.
• Educate them on what they need to know before they buy a car so they can get the best deal.
• Pre-qualifying saves time and hassle at the dealership.
• 0% financing by the dealer vs. CU financing.
• Add-on fees/products – cost more at the dealers.

4. Loan Ideas

• Offer a payday loan alternative.
• Create a program for subprime borrowers.
• 90 days no interest loans.
• Consider extending new car loans out to 84 months. (Almost 25% of new cars financed in Q1 of 2014 were extended for 7 years.)

5. Auto Loan Recapture

• Identify members who have auto loans elsewhere and who could save a min of $XX by refinancing.
• Make a personal, specific offer and quote:
• Rate
• Monthly payments
• Annual savings (“Here is exactly how much we can save you in a year.”)

6. Expand Indirect Opportunities

• Market to members according to life milestones to get CU loans from retail financing … aka Lifestyle Lending.
• Create new indirect relationships with local businesses such as:
• Dentists
• Furniture/Appliance stores
• Veterinarians
• Plastic Surgeons
• Provide them with quick responses and competitive rates.
• Everyone wins!

7. Target Gen Y Early

• Help them establish credit with a small loan, no application fee, a competitive rate, and a one-year repayment term.
• This will:
• Establish a relationship with that borrower,
• Give the CU an opportunity to interact and educate them
• Help build credit.

With so many lenders vying for the same share of mind and wallet, if you really want to connect with members you need to get creative with your loan strategies. 

Loan applicants? They’re out there. Sitting at the breakfast table in their bunny slippers with their smartphone in hand with no plan to visit your branch. You need to be the solution at their fingertips.

Yvonne Sambrano

Sr. Lending Product Manager

EPL, Inc.

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.