Innovation starts now, here’s one that can be easily accomplished

What does innovation look like? The definition is the process of translating an idea into a product or service that creates value. Swing open the front doors to your credit union, where can you be innovative?

When it comes to enhancing your financial products and service offerings to members, sometimes the most obvious place to start is where the growth potential is. The growth in auto loan originations continues to climb in 2017, and this is a great place to look. Online auto buying directly linked to your website is very innovative. Providing an online location where you can digitally serve members with what they want and need during the car buying process is easier than once thought possible. Just recently, Chase Bank introduced Chase Auto Direct, an online resource to improve the traditional car buying process and Bank of America is currently testing out their own platform in select markets before their grand launch.  However, credit unions have been offering this to their members for over a decade. If you are a credit union with an online auto buying platform, pat yourself on the back. If not, listen up. Even if you have one, have you reviewed it to ensure you are optimizing it for your members and growing your auto loan portfolio?

The online research and shopping habits of consumers is a simple, yet hard to ignore statistic: 85% of car buyers are shopping online! Out of that number, less than 1% is satisfied with the process. Credit unions are in an enviable position to change this perception. Members trust credit unions. That is a good thing because the online universe is large and unpredictable. There are millions of internet sites dedicated to auto buying vying for your members’ attention. These sites exist because consumers spend on average 14 hours over 4 months researching before making their vehicle purchase.  Proof of concept has already been vetted.  Don’t let members be taken advantage of, or burned.  Provide them with a trusted, feature-rich resource of their own, through you while you find out which of your members are car shopping.

Once you have a resource, the work doesn’t stop there, simply splashing fancy vehicles across the screen won’t do it. A true buying site includes the ability to help members calculate payments, learn about trade-in values, understand about traditional financing versus leasing, building a vehicle of their dreams and saving their information, and finding out what new and pre-owned inventory is available in their area. Helping members and being a valued resource can be accomplished. Try working with a vendor who understands the online world of car buying and the innovation of staying ahead of trends. Behind the fancy web pages that makes it attractive to members, is a resource that should work for you as well. Yes, lead generation needs to be part of the equation. Your credit union will benefit from the ability to interact with members at different stages of research and buying, this builds business.  Equally as important, you should be able to customize the site to match your wants and needs while also highlighting the dealers you have solid relationships with.  Your goal is to close the auto shopping and buying circle.

Being innovative also involves messaging and engaging with the member. I am sure there are many credit union sites that are beautiful and useful, but if no one knows about them; they aren’t really a service to anyone. It’s not hard to imagine how Chase will push the message out to customers about their auto buying resource. Credit unions should be doing the same and can easily through partnering. In-branch messaging, email marketing, direct mail, staff engagement and all other touch points should be part of your credit union’s strategy to promote your auto buying site.

It really does matter how innovative your credit union is. Credit unions are doing an incredible job with a market share of total financing. In Q1 2017, credit unions were up 2% over the same period in 2016, during this time banks’ market share went down by 2.3%. Loan terms continue to increase and dominate the market. Gaining in popularity is the 73 to 84 loan term that is experiencing an increase of 3.6% over 2016, credit unions known for their great rates are positioned to take advantage of this trend. Going back to innovation, payment calculators will help members looking to finance understand the payment as your rates are built in. Help members understand how rate translates into payments they can afford and what it means to them as they enter longer term loans. Advertising rate alone will not bring them in.

Portfolio balances, loan amounts, and auto payments are reaching record highs. Members are looking to be serviced, make it easy for them to do more business with their credit union.  The credit union movement is powerful, be the resource your member is looking for!

Robert O'Hara

Robert O'Hara

Robert O’Hara, vice president of strategic alliances at GrooveCar, is a veteran of the credit union industry having worked as director of lending and operations at a Long Island ... Web: Details