Where To Invest In Technology In Order To Grow Lending Portfolio
SAN ANTONIO-Lending cannot grow without an investment in technology infrastructure, according to one person.
David Polet, Voice of Consumer manager with CUNA Mutual Group, reminded attendees at CUNA's America's Credit Union Conference that consumers have already invested in technology themselves, and one off-shoot of that is they aren't dependent upon their credit union for information.
"How do you get new members in the door? By investing in technology, not loan officers and new lending processes," said Polet.
The implication, he said, is that credit unions can only grow loans by focusing on how consumers shop. "Members have the ability to compare rates and quotes for loans at the tip of their fingers," Polet reminded.
Credit unions need to adapt to the changing shopping landscape in order to grow loans. Fifteen years ago, the loan officer controlled the lending process because the consumer didn't have access to as much information. Today, that's not the case, he added.
"Generation Y consumes and makes decisions completely differently than their parents," Polet said, urging credit unions to embrace technology to meet Generation Y's needs and to attract new members for loans.
"Baby boomers are retiring; their lending lives are coming to an end. That's not the case for Generation Y whose lending lives are just beginning to grow," Polet said.
He noted credit unions have no choice but to focus on meeting the expectations of Generation Y, especially since there are 84-million Generation Y consumers versus only 80 million baby boomers, according to 2010 US Census Bureau findings.
Polet explained how banks have more technology that is in tune with what Generation Y consumers expect. "Picture check deposits, text banking and mobile banking are all being embraced by banks," said Polet, highlighting the need for credit unions to do the same.
In fact, many analysts are predicting mobile banking will overtake online banking in just a few years, he added.
"You must know your members and potential members to effectively use new technology," Polet said.
According to a December 2009 Mercatus mobile banking study, mobile financial service capabilities were more influential in a consumer's decision to select a financial institution than availability of online banking, access to ATMs, or nearby branches. The study also indicated that by 2014, more consumers will access their accounts through mobile devices than through the Internet.
"Mobile banking is clearly taking over the online channel. Keep in mind, in order to grow member loans you must grow your membership, which means your technology must benefit future members," said Polet, stressing the need for credit unions to embrace mobile technology to attract the mobile member.