Lending Trends and Loan Applications: What’s Next for CUs?

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Online lending and loan application practices have been around for a while, but many credit unions have not implemented or improved these processes. While COVID-19 mandates and social distancing practices may have pushed the tide toward more online lending, there are many reasons why it is here to stay and why there could be more changes on the horizon.

Digital Service Is Expected

Having reliable and expansive digital services available for members is a must for credit unions hoping to survive these tough times. Brick-and-mortar locations are becoming less and less frequented, which means you are losing members and customers if you aren’t implementing and expanding your online services often.

The current pandemic has pushed a lot of things to digital platforms out of necessity, but rather than seeing these as a temporary stop-gap measure, credit unions should consider adding things like online lending and loan application services to the website permanently.

Take Advantage of PPP Issues

Many small businesses applying for the Paycheck Protection Program loans had a hard time accessing the things they needed through big banks. Everyone was scrambling for the same funds and the lengthy wait times and delays cost a lot of small businesses their ability to keep their doors open, even at diminished capacity.

While this is nothing to celebrate, credit unions could use this as an opportunity to market themselves as a better alternative lender to the big banks and PPP. Customer service is always a strength that credit unions wield, so why not tout it during a time when lots of business owners are frustrated with their current bank’s lack of satisfactory service?

Travel Changes Mean Lending Changes

According to this CU Management article, some interesting loan trends may start to emerge as some areas lower their COVID-19 precautions due to dwindling case numbers.

There is a potential for air travel and hotel stays to decline and stay low for a time, even after COVID-19 has passed. This doesn’t mean that everyone will suddenly stop wanting to travel, but it does mean the mode of transportation could be changing.

RV and boat sales are expected to increase in the near future, as a safer travel alternative to flying, which means loans for these items will also increase – something for credit unions to think about in the coming months.

Credit Union Culture Is an Advantage

Though digital solutions often focus on taking out the human components, there are ways to incorporate the standard credit union customer service throughout the loan application process. Creating virtual inroads to your credit union by using your CU website to showcase both your commitment to helpful customer service and the ease of online loan applications can add value to potential customers.

Building custom lending processes that highlight the personal touch credit unions can offer is a great way to differentiate your services from the services your competitors have to offer.

IMS Integration Has You Covered

IMS Integration’s Online Loan Application white paper is a quick read and helps outline many of the benefits of creating web-based loan applications.

We also offer online self-service forms, which can be customized to meet your credit union’s and your customers’ needs.

We also have expertise with many software solutions for your credit union. Contact us to learn more about how we can help you.

Upgrade to Web Loan Applications

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The pandemic has negatively impacted the U.S. economy. Approximately 36.5 million people are unemployed, where three million people filed for unemployment benefits in May. That number is expected to rise as more businesses permanently close and continue to lay off workers. As people consider sources of financing to stay afloat, many will turn to your credit union for a personal or small business loan.

The effects of COVID-19 will have a lasting effect for a long time. Right now, your members are looking for more than just a lender. They are looking for their credit union to provide the services they need with ease. That includes helping with bill pay, financial guidance and emergency loans. 

Web loan applications are designed to collect data, perform automated loan decisions and incorporate your credit union brand to deliver a super user experience. Filling out manual applications is a laborious task and one that’s not easy to do with credit unions relying on drive-thru and digital services for business. Plus, automated technology accelerates the lending process. Regardless of the size of your credit union, a fast loan origination process gives you a competitive edge.

With the technical infrastructure to process online loan applications, your credit union will be able to provide valuable insights into customer needs, reduce risk and simplify reporting, increase productivity and save time and money with each transaction. Loan officers can apply their expertise where it will be of the greatest benefit and shift their attention to value-add services. This becomes vital as small businesses turn to their credit unions for relief, especially with new government assistance programs being rolled out. 

The Small Business Administration (SBA) launched the Paycheck Protection Program (PPP) to provide a direct incentive for small businesses to keep their workers on the payroll. This assistance is vital in expanding access to capital for entrepreneurs, especially underserved borrowers, who contribute to a community’s economy. And, it helps your credit union tap into another product for members.

As a lender, it’s important to look for innovative solutions to adopt with changing times. Without the ability to process web-based loans, you’re missing out on an opportunity to compete with other financial institutions. Borrowers are depending on you to help them in these stressful times. Remove the complications out of the loan application process  and provide easy access for your members.