2 minutes
While I’m not usually anywhere near the first in line when the latest thing is released, I have to say I was pretty intrigued with the prospect of self-driving cars after Brett King, author of bestsellers BANK 2.0 and Bank 3.0 and founder/CEO of Moven, a direct mobile bank, talked about them at CEO/Executive Team Network.
I had previously paid little attention to Google Car, but the picture King painted was right up there with the long-awaited Jetsons’ flying cars.
First off, there’s the safety factor: “In 2 million miles,” he said, “Google car has not had an accident that was not caused by a human. Human drivers will eventually be banned from city centers. We’re just too risky.”
Then there’s the efficiency factor: Friends and family members may more easily be able to share a car, because after taking one owner to work, the car could return on its own to shuttle a second person to a job or run errands. The car could even make money in its spare time, hiring itself out in a robotic version of Uber or Lyft.
These paid ride-sharing services are already causing serious financial headaches for New York City credit unions in the taxi medallion loan market. And cool though self-driving cars are, they could pose an even bigger threat for CUs and other auto lenders, believes Brian Garr, chief revenue officer for Cognitive Code, which develops and deploys artificial intelligence systems that help people connect with computers in “completely natural and intuitive ways.”
“On average credit unions have 33 percent of their loans in automobiles (according to NCUA),” he writes in “How Uber and Lyft Will Disrupt Credit Unions.” “Just like Uber has changed forever the business model for cars for hire, so will Uber plus autonomous cars forever change the way we think about car ownership.”
Garr, a Center for Credit Union Board Excellence member who serves on the audit committee of $892 million IBM Southeast Employees Credit Union, Delray Beach, Fla., wrote this CUES Skybox post after attending January’s Consumer Electronics Show in Las Vegas.
How a serious drop in auto ownership might impact your credit union is a great question to ponder at your next board meeting or strategic planning session. In the meantime, get ideas for “Driving More Auto Loans.”
In our lending cover story in January, we questioned how student loan burdens are impacting young adult borrowers. According to a 2015 TransUnion study, the answer is not that much at all. Thank you, CUES member Allan Stevens, VP/chief credit officer for $886 million Franklin Mint Federal Credit Union, Broomall, Pa., for pointing this out. Get highlights of the study.
