5 Reasons Your Members are Borrowing from the Competition
Your member numbers are up. Your product portfolio has evolved to meet the demands of the financial industry. You invested in the technology that millennials expect, and have been active on a variety of media channels to attract new and younger members. While all signs are pointing to a banner year for your credit union, your loan portfolio is lagging. Why aren't your new members borrowing from your credit union? Let's take look at possible areas where your credit union lending solutions may need some minor tweaks, or possibly a complete overhaul:
1. Is it time for lower rates?
With the increased options in lending solutions available in today's market, it may be time to get more aggressive with your rates. Younger members aren't afraid of new technology and are comfortable with non-traditional lending solutions, such as Lending Tree, Affirm and more. As a result, these younger members are sharing their experience and know-how with others who are becoming more comfortable turning to technology for services that used to require face-to-face dealings. If you are ignoring the rates of less trustworthy, but more readily available, loan grantors, you may be hurting your lending business.
2. Too much hassle to transfer the loan.
Let's face it... life can be a hassle. Between running kids to practices, getting to work on time, paying bills, yard work, and all the other running around we do, who has time to transfer a loan? It is crucial to not only make the process simple but stress that simplicity in your marketing. Cleary outline why the transfer will be worth it to the member and how much money they will save.
3. Their main account is elsewhere.
Maybe your new members are just trying out your credit union and diversifying their finances. There is a contingent of people that don't fully trust the big banks to protect all of their money so they keep some in a "safe" local institution that is less likely to be the victim of a large-scale cyber attack. This group clearly recognizes the value of insured savings, but perhaps overlooks the value of loans from a more local source. It is important to show these members all of the services, including loans, that your CU can offer to compete with the major financial institutions.
4. Your credit union lending software is outdated.
Technology changes fast. As soon as a new technology becomes mainstream, there is already a more advanced solution entering the scene. So while you may think your mobile lending platform has done the trick, if you aren't onto the next new thing, you run the risk of further eroding your numbers. Your mobile platform needs to offer seamless accessibility to the loan programs you offer in paperless fashion. eDocuments and eSignatures are an absolute requirement in today's loan environment. Members want the purchase process on major items to occur with minimal headaches and at the speed of their lives - and that's faster than paper document processing allows.
Depending on the demographics of your member base and the area you operate, it is possible you are dealing with a group of people who don't need loans as much as you would like. Perhaps, they don't realize credit unions can meet their lending needs. If they are carrying high-interest balances on credit cards or financing cars through dealerships, it could be a matter of better education. Your members and potential members need to see that you can offer them a loan at a better rate and with fair terms.
If your credit union performance is lagging in loan originations, consider that any of these items may be the source. Having competitive rates, clear messaging on services you provide, and up-to-date amenities like eDocuments and eSignatures will keep you competitive in the loan arena.