TransUnion strongly believes in credit unions and their mission to serve their members. That's why we're interviewing experts about how credit unions can stand out in an increasingly competitive market. This is the third installment of the series. You can also read our Q&A with Sean Flynn and John Wirth.
Today's consumers demand a frictionless experience, and credit unions need to deliver that, according to Jeremy Pinard, Alliant Credit Union's Vice President of Consumer Lending.
In this interview, Pinard talks about the unique consumer appeal of community-focused credit unions, and why credit unions would be wise to explore how emerging technologies like artificial intelligence could enhance their offerings.
Question 1. What are the key trends impacting credit unions today?
Jeremy Pinard: A major one comes in the expectations today's consumers have for their credit unions. Years ago, credit unions were understood to be local, community institutions. Now an “Amazon effect” dominates, and the result is that consumers aren't going to accept any experience that's not frictionless, seamless, and easy.
For credit unions, it's been a struggle over the past few years to determine how quickly we have to fully commit to that evolution. We've done a good job making the move to be online and digital. But I think a lot of credit unions will have to continue to evolve as that Amazon effect takes hold with consumers more and more.
Q2. How can credit unions accelerate their digital lending strategies to meet members' demands for more online and mobile options?
Jeremy Pinard: Alliant is really taking the digital approach seriously. When I joined Alliant in 2014, we had 11 branches. We've since gone down to two branches and are really focusing on the digital experience and the digital channel. We look at it from a digital direct-to-consumer approach.
We built our own loan origination system (LOS); we've built our own mobile app. Now, we're in the process of building a new online banking site. We're really focusing on the member experience, integrating as much efficiency and frictionless experience as possible.
When we built our LOS, it was very critical to take the experience for consumers into account. We tried to build on that human-centered design and make sure that the consumer came first.
Q3. How do trended and alternative credit data enable credit unions to have a greater impact on their members and the communities they serve?
Jeremy Pinard: We're starting to look at partnerships with TransUnion and others to examine how we should use machine learning and alternative data to build better decision engines and identify high-propensity consumers who can use our products. One of the things we're looking to do is reach the broader market with our products and services. We offer a lot of things that would make consumers, if they knew about it, want to do business with us.
Q4. Credit unions are facing increased competition from FinTechs and other lenders, so what sets credit unions apart?
Jeremy Pinard: I think one thing that differentiates credit unions from other lenders — and it's also one of our difficulties — is we don't have just one driving force on the bottom line. It's not all about returning revenue back to the shareholders. Sometimes we may have to make difficult decisions where something's not the most profitable choice, but it's the right choice for our members.
Being cooperative or membership-owned separates us from other lenders, but we can't use that as a crutch. We’re competing against all lenders, so we have to make decisions to be profitable long term and continue to reinvest back into the digital channel, which is expensive. One thing credit unions understand is that competition will only increase, so we're going to have to be part of that.
Q5. What's your perspective on the future of data and analytics for credit unions?
Jeremy Pinard: Data and analytics are critical – we all see that. It's crucial to find partnerships that can help you identify those data points. We have a ton of data inside of our four walls that we could really use to build custom scores and modeling, and use it with machine learning and AI to drive new value. Data and data analytics are going to be critical not only for becoming more efficient and profitable, but also for delivering the best products and services at the right time to members when they want them.
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