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 fifth installment of the series. You can also read the prior installments: Sean Flynn, John Wirth, Jeremy Pinard, Fred Ryerse.
There's more data available now than just five years ago and credit unions should fully use the capabilities available to them, says Jim Block, Baxter Credit Union's Chief Lending Officer.
In this interview, he delves into how trended and alternative credit data can give credit unions a leg up on competitors and why credit unions' holistic view of members is a differentiating factor.
Question 1. What are the key trends impacting credit unions today?
Jim Block: As more transactions go digital and mobile, credit unions must strive to remain relevant to consumers. Your products need to be relevant, they need to have a good value proposition to the consumer, and you have to be able to meet the member on the channel where they're interested in interacting with you.
Q2. How can credit unions accelerate their digital lending strategies to meet members' demands for more online and mobile options?
Jim Block: Consumers are constantly looking for solutions that can be delivered online or via mobile. We're investing in those capabilities, with the desire to enable our members to fulfill their loans completely online if they so choose. If they want to talk with an individual for counseling, we're able to provide that service face-to-face, but if they prefer a completely automated interaction we can provide that too.
The ultimate goal is to start and finish a given transaction within a minute or two – and require the member to input as little information as possible. If it's a new member interaction, the member may need to complete more information, but we're really trying to use what we know about the consumer to minimize the friction a person experiences when they're interacting with us.
Q3. How do trended and alternative credit data enable credit unions to have a greater impact on their members and the communities they serve?
Jim Block: We're looking at data that we get from credit bureaus differently now. It's not just about how a member is paying their bills, but also gaining broader insight from both fraud detection and predictive standpoints. For instance, based on the trend of how a consumer is using credit, do we see more or less financial stress in their future? Can we make more aggressive loan decisions based on the trajectory of where their financial situation's heading?
Q4. Credit unions are facing increased competition from FinTechs and other lenders, so what sets credit unions apart?
Jim Block: The real advantage credit unions have is we take a holistic look at our members in order to provide a solution that fits best. We have a multitude of products; we're not a monolith offering just one. By having a full suite of products, we can design something that's a unique and good fit for a specific consumer.
Sometimes that requires one-on-one communication with the member, but more and more we're able to put those options online. We want consumers to compare and contrast products and find the right bundle for their needs – not only at the beginning stage of their careers, but as they accumulate wealth and grow and have children who may become members. It's not just a product designed for one point in time; it's more the breadth of what we try to deliver to our membership.
Q5. What's your perspective on the future of data and analytics for credit unions?
Jim Block: I think for credit unions to continue to grow and be healthy, they really have to consider all the data that's available to make the right decisions. Credit union success is just an accumulation of all the right decisions they've made in the past. Knowing what data is available and being able to use all that information to make the right decisions faster will drive the success of credit unions going forward.
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