3 minutes
Aggregators, targeted-platform offers and open APIs streamline member experience.
Sponsored by Experian
Text messages, fitness trackers, Uber, Facebook, smartphones. These innovations in our connected world have changed the way we communicate, live and work.
Seamless experiences and convenience are now baseline expectations of consumers. We get annoyed if a webpage loads a second too slow, so the idea that it takes weeks to obtain mortgage financing is inconceivable. Filling out a direct mail credit card application? No time for that.
Real-time interactions are now a necessity: 64 percent of consumers expect companies to respond and interact with them in real time, according to a recent Salesforce study.
The rise of mobile financial services means consumers expect to complete their financial transactions with a click of a button.
- 57 percent of consumers say it’s critical for companies to have an easy-to-use mobile experience.
- 53 percent of smartphone owners use mobile banking, and 28 percent use mobile payments.
There is also a shift in the mortgage lending space, with borrowers moving toward online interaction for mortgage loans (23 percent, up 8 percent from 2012) versus in person (44 percent, down 25 percent from 2012).
Adapting to consumers’ changing behaviors can feel daunting, but there are solutions to help credit unions adjust.
Digital Income and Asset Verification
Account aggregators entered the financial services scene in the late ’90s, with models “scraping” an individual’s financial information from sources such as banks, securities firms, retirement plan custodians and insurance companies. This made it possible for lenders to gain insight into their customers, but failed to create a complete financial picture.
Aggregators today leverage credit and transaction-level data to quickly assess ability to pay, income and other assets. For example, a consumer’s checking account information is truly a part of the lending process. This is a win-win for lenders and consumers. It streamlines the lending process, allowing faster transactions, providing deeper insights about consumers and potential borrowers, and helping consumers change a thin-file credit history into a thick file.
Personalized Offers
Many lenders continue to rely heavily on direct mail for personalized offers, but for some consumers, those offers will never be seen. Today, the world demands a digital experience that engages consumers at a place and time convenient to them. This applies to offers of credit as well. Lenders can and should target relevant credit offers to consumers in the spaces and platforms they spend the most time: email, online, social media sites and mobile devices.
Solutions exist to help lenders deliver relevant, firm offers of credit to consumers via these digital channels. In short, they can engage with consumers in the places they are consuming media today—giving them personal offers in a sequenced, trackable manner.
Open APIs
Open banking refers to the use of open application program interfaces that enable third-party developers to build applications and services for a financial institution.
The use of open APIs plays a significant role in revamping traditional credit union services; for one, it enables credit unions to build and launch a combination of new products and services faster than ever before. It also offers greater financial transparency options for account holders, ranging from open data to private data.
Credit unions will also likely find open APIs attractive as they require minimal connection effort while offering access to multiple third parties.
More and more, members are less concerned with a credit union’s branch network and more concerned with its online and mobile offerings. Credit unions that invest more heavily in digital capabilities and technology will be the winners in the long run, growing and remaining relevant.
Experian serves credit unions across all asset tiers with a team 100 percent dedicated to this industry. Beyond credit reports, the company offers data analytics, segmentation solutions, automated decisioning and digital strategies that help credit unions drive growth, compete through differentiation and protect against fraud and regulatory risk.
