From strategies to make a powerful member impact, to smarter approaches to collections and underwriting, this week, CreditUnions.com digs into the industry's loan engine.
Here are five can't-miss data points:
For credit unions, the lending machine is going strong. Loan balances in the first quarter increased $77.6 billion year-over-year. Loan growth, however, slowed from 9.7% in the first quarter of 2018 to 7.9% in the same three months this year. As the economics of some loan products change, credit unions across the country have uncovered hidden potential in their loan portfolios that better serves members in the process.
Read more: 6 Lending Strategies That Make A Powerful Member Impact
It costs approximately $1 a minute for the average call center to serve a caller, according to industry estimates. As such, reducing call volume by shifting calls to automated phone systems, online banking, and mobile apps can translate into big savings. For credit unions, outbound calling is an important channel for borrower communication, debt collection, and charge-off reduction. Analytics and member data are helping to improve those processes at Washington State Employees Credit Union, which is employing analytics and machine learning to make smarter, more efficient use of member solutions department resources, reducing costs related to its third-party collections partner and improving collections results across its loan portfolio in the process.
Read: Analytics Offer A Smarter Approach To Collections And Underwriting
Sometimes, best-laid plans go awry and a member needs emergency funds now. Not tomorrow. Not when business hours resume. Now. When that’s the case, the appeal of payday lenders — which tout convenience and immediate cash availability — can outstrip inflated interest rates and debt cycle dangers. For credit unions looking to come out ahead in a borrower's decision-making process they must compete on convenience as well as rate. Digital Federal Credit Union is one credit union that is making it easy to tap into extra cash. In June 2018, the credit union introduced its Quick Loan, a pre-approved short-term personal loan members apply for solely through online or mobile banking. The credit union automatically approves the loan — up to $1,000 — in minutes without a credit check.
Read: A Fast Loan When Members Need Money Now
The credit union mortgage portfolio totaled $435.7 billion in the first quarter of 2019. That’s a 61% increase over five years ago and the industry’s highest total to date. But as rates have risen in the past several years — although this might soon change — the market has shifted away from refinances and toward purchases. This change combined with advances in technology has ushered in a new era in mortgage marketing. Today, credit unions using geofencing marketing strategies are able to set a virtual geographic perimeter around a physical location and target promotional offers to consumers who enter selected zones. This degree of geofencing is easy and inexpensive. Geofencing for mortgages has proven more problematic. But, as more credit unions search for a solution, strategies are emerging.
Read: Good Geofences Make For Good Mortgages
Based on July traffic (and our editorial instincts), here are the top articles and blogs that appeared on CreditUnions.com.
Read: Best Of July 2019
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