Game changer alert: Amazon, the great disruptor, is coming for your auto loans

Auto Loans, the bread-and-butter profit center and member engagement tool of credit unions is about to experience the disruptive wrath that has decimated so many industries and businesses. Yes, AMAZON, the tech giant that started as a simple online book seller and has completely changed the way we shop for virtually everything, is going to begin selling cars online, packaged with financing, in 2024.

Credit union executives: remember all the discussion at conferences and news articles regarding your need to embrace “digital solutions” and technology? If this Amazon announcement doesn’t hit you between the eyes and lead you to immediately begin sourcing digital solutions partners, you might want to dust off your resume. You can only kick the digital can down the road for so long. 2024 is the year you MUST prioritize digital vehicle research tools for your members as car buying and financing begins online.

BUT FRET NOT, leave your resume in the file and in five minutes you’ll understand how you’ll compete and win against Amazon, so READ ON.

Let’s first understand the issues surrounding Amazon’s entering the auto sales space as it is all about the following simple truths:

1. Your members want easy and intuitive access to information, products and services with minimal effort and “clicks” 24/7 from any electronic device.
2. To succeed, you must provide easily accessible digital “touch points” for consumers to access the desired products, services and information.
3. If you have the right content, and in the case of vehicles, that is vehicle inventory, pricing, pictures, financing information and associated car research, then members will stay on your site and enter into your auto buying/financing funnel.
4. You must have frequent ongoing digital access to the consumer along with relevant data and consumer information while using machine learning and AI that can provide timely and relevant marketing and decisioning points to ultimately “drive” the online conversation to the desired outcome.

WOOAH, slow it down! That’s a lot to digest. But I’m sure you really don’t want to update your resume, so I’ll tell you more.

Now that you understand why Amazon is well positioned to sell cars with financing, the following is how credit unions will easily compete and win against Amazon and any other competitor in the auto vertical.

Here is why credit unions are better positioned, and ON PAR or better, than Amazon in the auto vertical:

• Other than social media, there are 2 digital channels that consumers touch frequently, generally daily or weekly
  • One digital channel is Amazon where consumers shop and are targeted/retargeted when they are online based on previous online activity and/or other relevant data.
  • The other digital channel is their financial institution via desktop, online banking and mobile app. Maybe it’s only to check balances, move money, see if a check or deposit cleared, etc. but all of those interactions are digital touch points. And with each “touch” you are provided with the opportunity, just as Amazon is, of offering messages, products and services and other marketing content.

So, from a “digital” touch perspective your credit union is ON PAR with Amazon’s daily/weekly frequency.

• Today there are fintech companies with digital solutions that provide the vehicle inventory, pricing, pictures and other research tools embedded in credit union websites for members to find their vehicle and enter your lending funnel. As fintech’s, these digital solutions are easy to get up and running in weeks, not months. So, from a vehicle inventory perspective, your credit union EXCEEDS Amazon for members’ vehicle searches.
• Fintech companies provide you with digital tools such as AI, machine learning and retargeting so that you control the online conversation. As an example, you can provide messaging regarding finding members’ new ride as they login to online banking. Or if they previously shopped on your site for a vehicle, but did not fill out a loan application, you can provide a message the next time they come to your site that invites them to continue shopping or to fill out your loan application. So, from a digital, AI and retargeting perspective, your credit union is ON PAR with Amazon.
• Credit unions have actual real-time data on their members that can be used for marketing and retargeting. For instance, you know the balances of members’ accounts and loans, how many payments remain on existing auto loans, VIN and age of vehicles, credit history, ages of family members, when a large vehicle repair occurs and much more. All of this data can be used to target messages as members come into your digital channel. If you don’t use this valuable information, know that other digital providers such as Amazon will access third party data and target your members. You EXCEED Amazon relative to consumer-related data to target your messaging.
• Tying it all together is the fact that credit unions have member loyalty/trust and “have the money/financing” making it a natural in terms of members finding vehicles along with getting approved on the credit union digital channel. People Helping People credit unions are the only ones in the auto vertical with members’ backs.

So, understand that vehicle shopping begins online 24/7 and if it isn’t on your website / digital channel, you have no visibility to it and no control of the online conversation, while competitors will acquire these digital footprints and market to your members. Your credit union is best positioned, with ongoing and frequent digital member engagement to provide vehicle inventory, research and buying tools while driving members deeper into your lending funnel and controlling the online conversation. Amazon is the latest entrant into the fast moving auto vertical but credit unions that embrace digital solutions will win by using technology to provide what members want – easy, intuitive 24/7 access to products and services. Leave your resume in the file and, immediately seek the fintech partner that can best help you accomplish your People Helping People Mission in the auto vertical.