In the face of pressure from big banks and independent online lenders, credit unions will need to pick up the pace to keep loan growth strong – especially in their two biggest loan sectors: autos and mortgages. Although credit unions have done well in recent times, lending in both areas appears to be trending down. Third-quarter analysis by Callahan & Associates shows year-over-year growth for total new and used auto loans at 28.4% at the end of September 2016, compared with 30.8% for the same period in 2015. YTD first mortgages also slowed slightly, with growth of 10.1% at the end of September, compared with 10.5% for the same period last year. And looking at first-mortgage market share, credit unions are losing ground: Their share was 7.3% through the first nine months of 2016, compared with 7.8% for the same period of 2015 and 8.1% in 2014.
Who’s picking up the slack? Primarily, nonbank online lenders like Quicken, Lending Tree and PennyMac, which have a solid toehold and are growing fast. In 2008, online mortgage lenders had a 23.4% market share; through September of this year, it’s grown to 48.3%, according to reporting by Inside Mortgage Finance. Just like retailers Amazon and Groupon, digital lenders are transforming consumer expectations by offering digitized access on any device, anytime and anywhere. It isn’t surprising; in its research report, The Digital Tipping Point, CEB found that more than 80% of consumers prefer to do their banking digitally versus personal channels.
Shift Into A Higher Gear
Time is of the essence if credit unions are to turn the tide and win back their loan business from these digital upstarts.
By digitizing and automating your marketing activities with the right tools, your credit union can develop effective loan acceleration campaigns that deliver messages targeted to a member’s specific interests, driving improved engagement and response that can help grow your loan portfolio.
How? By using data about members’ buying behavior and payment history that you already have in your credit union’s systems. All you need is a business analytics tool, email marketing and, ideally, a Customer Relationship Management (CRM) platform.
By digging into back end data sources (including core systems, loan origination, credit reporting and ACH) you can use a business analytics tool to identify which members are likely to need loans, what sort of loans they need and when.
Then, by targeting defined groups of members that have the highest propensity to engage on new loan offers, you can achieve a better return on your marketing campaign investments.
Hit the Accelerator
At Doxim, our credit union clients have found that the combination of business analytics, email marketing and CRM has enabled them to accelerate their loan growth by following four simple steps:
- Segment – Use either CRM data to identify members who are ready to buy a new vehicle or trade up for a larger home, or use business analytics to identify those who have loans at other institutions, including types of loans, terms and pay-off dates.
- Target – Armed with comprehensive information about members’ borrowing activities, match the right loan campaigns with the right members. Use email marketing to send out offers that are relevant to each target member and speak to individual interests.
- Follow-up – When a member opens, clicks through or forwards the email offer, their actions are captured in email reporting. If your email system is like Doxim’s, it will be integrated with a CRM, so qualified leads can be automatically assigned to sales staff, ensuring hot sales opportunities get followed up quickly, every time .
- Analyze – After launching the campaign, regular review of the sales pipeline helps determine whether any adjustments need to be made to messages or the process. With real-time analytics, lessons learned can be quickly and easily applied to the very next marketing campaign that’s developed.
To find out how your credit union can benefit from this four-point process for fast-tracking loan growth, download our latest eBook, Accelerate your Loan Portfolio Growth – Build Wallet Share and Realize ROI – FAST.