Six things to consider in this uprate environment
Seventy-two percent of financial institutions identified acquisition as a primary driver of revenue this year. They’ll face a significant uphill battle doing so as 86% of consumers surveyed in Vericast’s 2022 Financial Services TrendWatch are not inclined to make a switch.
But there is one critical product where consumers are open to working with a different financial institution: loans. As home values have risen and continued inflation looms, home equity loans and lines, as well as non-secured lending such as credit cards, will see an influx of interest and applications.
This all presents a prime opportunity to both get your foot in the door by presenting an attractive loan offer to prospects and to deepen relationships with current members. It also presents an occasion for you to be front and center when your members need you most—during economic unrest.
6 Key Considerations
Here are six things to consider for your lending strategy and marketing:
1. Talk up your lines of credit. Since housing prices have risen, it’s a great time for homeowners who have already refinanced their mortgages to take out home equity lines of credit for home improvement expenses. If they received a low fixed-rate mortgage to start, they can now tap into their growing equity.
2. Highlight your lower-interest cards for those with revolving balances. Credit cards get a bad rap during inflationary times, as rates and monthly payments creep up for those who carry a balance. However, managed wisely, they can be favorable when used for balance transfers and rewards on everyday purchases like groceries and gas.
3. Communicate your rates in your messaging. Interest rates are expected to rise this year. These rate hikes, coupled with very tight mortgage and auto markets, will mean increased competition for loans. Make sure consumers are aware of your competitive rates by highlighting them in your marketing.
4. Target “in-market” consumers. If a credit union intends to be competitive in this tight loan acquisition market, the key lies in striking while the iron is hot. You must reach prospects with your best offer precisely when they’re in the market for a loan, and anticipate the needs of your current members, keeping your preapproved offers top of mind so they know you stand ready to serve them.
5. Offer multi-loan preapprovals. People lack confidence in their ability to be approved for a loan. Eliminate that concern by using preapprovals. Then, when they are in the market, they will think of you first. And with multichannel, multi-loan preapprovals, members can access, review and accept multiple prescreened loan offers at every touchpoint, driving loyalty and revenue.
6. Make it easy. “Simple” and “uncomplicated” are appealing. If the application involves too many steps, requests too much information or takes too long, people will abandon the process. Take a cue from fintechs that have gained favor by making the loan application process easy.
Keep Marketing ‘Turned On’
In this uprate environment, consumers are much more rate aware and discerning of loan terms, so they’re more likely to shop around for a favorable loan package. You must make your loan marketing preemptive and your offers easily actionable.
It’s also the time to be steady in your messaging and presence. During times of unrest, it’s important to keep your marketing “turned on.” During the pandemic, a lot of companies placed their marketing on hold, which made it harder for them to regain their place in the minds of members and prospects once the world regained its footing. To stay top of mind, take heed and stay the course.
Also remember, data is a key factor in lending success. With the right data, you can lend smartly and reach the right prospects for your credit union. cues icon
Stephenie Williams is VP/financial services marketing product and strategy for Vericast, a CUES Supplier member. Learn more about Vericast’s strategic, data-driven loan marketing programs by calling 800.351.3843.