Sarah. Cooke, Tuesday, December 22
Credit unions are making great waves – as they always do – during this coronavirus-induced economic downturn. Members are increasingly turning to their credit unions for support in this time of crisis.
Equifax is a great partner of ours and shared some really interesting data regarding credit union lending versus the overall market during our recent LIVE webcast. You can view the recording here.
Credit unions have great opportunities in auto lending, mortgages and credit cards with predictive marketing for loans. Car loan originations are growing at credit unions, even as dealers have had to adapt to government-mandated lockdowns and consumers’ fears regarding the coronavirus.
Plus, credit unions experienced far fewer delinquencies in their auto loan portfolios, affording them the opportunity to do even more for their members. Credit-data based marketing provides incredible target marketing prospects, driving up return on your credit union’s marketing investment and revving up leads.
Marketing that places your message in front of the right members at the right time with predictive marketing and credit prescreens can help credit unions leverage their business model advantage even more!
During uncertain times, your members need more information, greater transparency and confidence in their financial decisions. Credit data for credit unions is a necessity, so why not share it with your members? They will appreciate receiving their credit score to help them better understand their financial situation, ensure nefarious hackers are not damaging their credit score, and borrowers can get a better view of how their credit score affects their loan pricing and borrowing power.
In part, credit unions’ success has been because they are generally conservative lenders, as demonstrated above. Lending to members with lower credit scores can help your credit union expand those razor-thin interest margins through this enduring low-interest rate environment. Credit unions have far more room to make more loans in lower credit scores through their business partners, like Ser Tech and our friends at Open Lending.
For our part, Ser Tech can help you target market consumers within your field of membership who meet certain risk profiles as set by the credit union. We can reach them through mobile and digital channels, or good old reliable direct mail. Targeting your members and potential members with credit data gives your credit union more bank for its marketing buck. Pairing our marketing campaigns with Open Lending’s default risk analytics and insurance is a smart way to ramp up lending with confidence during tumultuous times.
In addition to credit unions’ auto lending bread-and-butter, members are moving to get out of congested areas where coronavirus affects more people, while others might be seeking new job opportunities as the pandemic has shut down their previous businesses and employers. Mortgage lending is strong among credit unions and growing. Let’s take advantage of the current market to help even more members discover the benefits of credit union membership!
Finally, credit unions have been slow to warm to credit cards. They are admittedly riskier, but members are obviously seeking them out as illustrated below by Equifax. Credit unions are well-known for serving their members, so why not take advantage of this opportunity to polish up your credit card programs – especially right before the holidays – and really demonstrate the power of credit union membership?
Credit unions were able to harness opportunities in the past, from the housing crisis of 2008 to the Bank Transfer Day movement to increase memberships and share of wallet. Aside from helping more members, increasing your credit union’s scale is critical to continue serving members down the road in the ways they want to be served. These loan opportunities represent growth, not for growth’s sake, but to be able to invest in new technologies that serve members better or create back-office efficiencies to boost profitability. They can help introduce more members to what credit union member-ownership means.
Winston Churchill is often quoted as saying, “Never let a good crisis go to waste.” People are hurting, and credit unions have a solution. The time to capitalize, for your credit union’s and your members’ sakes, is now.