Trends in Auto Lending

 

Today, credit unions are tasked with adapting older or outdated processes and services to a newer market. Add a pandemic to the mix, and you see a surge in online and mobile banking that will be hard to ignore from now on. And auto lending is no different.

Here are some trends in auto lending to watch for.

Online Car Shopping Trends

With social distancing and increased cleaning protocols, shopping for cars online has become a go-to for those in the market for a new ride.

And once they start that online car shopping process, interested individuals want to make sure they can get financing before they invest themselves emotionally in a car they won’t be able to get a loan for.

More and more, the future of auto shopping and lending is going to be virtual. And that’s why your credit union needs to be ready to embrace the following trends to capture your portion of this audience’s attention and business.

Early Loan Preapprovals

61% of new car financing happens through vehicle manufacturers and dealerships, but the majority of used car financing takes place at banks and credit unions.

This presents an opportunity for your credit union to offer auto loan pre-approvals to members through multi-channel campaigns so you can reach them before they try to finance those loans through other dealerships or financial institutions.

Increase Loan Amounts

CU Management has some compelling insights about how credit unions can play to their auto lending strengths:

“Credit unions tend to go a little bit larger in the average amount financed compared to banks and finance companies…They don’t go out the longest terms, but when you combine their sweet spot of 73 months with low interest rates, credit unions offer the most competitive product in the marketplace, particularly for prime and super-prime customers.”

By increasing loan amounts and offering competitive interest rates, you can give your members the opportunity to treat themselves to a slightly nicer car than they anticipated. You can position it as a post-pandemic opportunity at pandemic-like rates. This will be appealing to your members, especially as they watch gas, home remodel materials, and other prices go up in response to the vaccine rollout and the decreasing COVID restrictions.

Leverage Past Applications for Refinancing

Refinancing has defined many interactions between consumers and financial institutions in the last year, so why not keep that momentum going?

Credit unions can recapture a lot of business by going back through 2019 and 2020 loan applications that were lost or abandoned, and offering those applicants who are members some refinancing options.

Increase Education Efforts

The pandemic gave us all a good look at which areas of our lives – especially those tied to finances – we could use some more education in.

Credit unions are perfectly positioned to offer a wider variety of educational content geared toward different financial situations and age groups. What millennials need right now may not be the same as what Gen Xers needed at that same age. Tailoring your education to more targeted demographics can broaden your credit union’s reach while also appealing more directly to younger generations, who are always looking for more value and insight from expert brands.

Focus on Alternative Credit Data

Many millennials and Gen Zers are not going to have the traditional lines of credit that their parents and grandparents had when applying for loans. For those who are too young to have a well-rounded traditional credit score, take a look at other financial areas such as rental records, utility payments, address consistency, and employment history. 

This is a great way to capture a traditionally overlooked population looking for an auto lender.

Tech Upgrades

IMS Integration can help improve your credit union online offerings, starting with web loan applications. IMSI’s online loan applications are designed to incorporate your credit union brand and image and can be designed to collect as much information as you need.

Request a consultation today for more information about our credit union solutions.


Credit Union Leadership Tips for Improving Performance and Problem-Solving

 

“The strength of the team is each individual member. The strength of each member is the team.” –Phil Jackson

Credit unions, like many businesses, are coming off one of the toughest years in modern history. To get through this and start moving forward with some solid momentum this year, let’s talk about some credit union leadership tips to improve performance and solve problems.  

Separate the Problems

There are two different types of problems: ones you solve and ones you can disregard.

As a leader, your employees should come to you with potential issues, but it’s important to be able to distinguish which ones you need to devote time and resources to, and which ones are isolated incidents or one-off problems that aren’t likely to crop up again.

Just because something isn’t working doesn’t mean it is a problem that needs to be solved. A problem is only worth your time if it can be assessed in context with your goals and you determine it will inhibit you from reaching those goals.

Don’t Lose Sight of Your Goals by Hyper-Focusing on Damage Control

There are tons of examples of the 80/20 rule in business, which states that 80% of all business success is going to be attributed to 20% of its processes.

But if your only focus is damage control or problem-solving, the 20% of the processes that are necessary for your credit union to grow isn’t being completed.

One way to change this trajectory is to practice your own 80/20 strategy – encourage your employees to spend 80% of their time doing their regular job duties, and allow for 20% of their time to be focused on brainstorming and implementing new ways to grow your business.

Losing sight of your goals is just as bad as not having any in the first place.

Embrace a Targeted Approach

There are always more problems. Even if you have a perfectly trained staff that never makes mistakes, you will still encounter issues.

And expanding your resources doesn’t always help. Kristen Cox, consultant and former Executive Director of the Governor’s Office of Management and Budget in the State of Utah, talks about the “seductive seven” – common ineffective tactics that organizations often use when responding to problems.

The Seductive Seven are:

  •  More Technology
  • More Data
  • More Strategy
  • More Training & Communication
  • More Reorganization
  • More Accountability & Assigning Blame
  • More Money

These things are seductive in that these things often pull focus and allow leaders to fixate on these shiny solutions rather than creating space for any actual problem-solving.

Kristen goes on to say that increasing performance means leaders must “start by stopping.” Your credit union’s resources are not infinite. So, rather than employing lots of quick fixes and buzzword action plans, you must devote your time to training your staff to recognize when to stop doing things that aren’t working.

It seems counterintuitive at first, but success comes not just from doing things that are helpful, but also from ceasing activities that don’t return good results, axing technology solutions that don’t work for you, and amending processes to weed out redundancies.

Implement Software Solutions That Work

As we said, it’s not about implementing more technology – it’s about implementing the right technology. And IMS Integration is here with your credit union-specific problem-solving software.

IMS Integration is here with a full range of credit union software solutions to take your problem-solving effectiveness to the next level.

Request a consultation today for more information about our credit union solutions.


Financial Preparedness Approaches for the Future

 

Financial preparedness meant something like a “rainy day” stash or “disaster fund” before the events of 2020. Many credit union members were lucky enough not to have worried about what it takes to be financially prepared. If they don’t live somewhere with extreme weather, many thought financial preparedness plans didn’t really apply to them.

And then a pandemic happened, and nearly everyone in the USA and the world was forced to take a hard look at their financial situation because the stability we thought we had was gone.

Credit unions and members alike should be looking forward with a renewed appreciation for financial planning. Let’s discuss some important financial preparedness approaches for post-pandemic life.

Have a Plan B

In 2020, many workers experienced a sharp decrease in wages due to layoffs, furloughs, and quarantine-related shutdowns or capacity limitations. While we hope never to live through something like that again, it’s important to realize how desperate many families’ situations were before the pandemic hit.

According to CNBC, “roughly 1 in 3 households had trouble making ends meet right before the coronavirus pandemic.” 33% of the population were struggling to keep up with their bills in a normal financial climate, and that number only grew as the pandemic stretched on.

That’s why having a plan B is essential. If you encourage members to start now, it’s much easier to get through rough patches when you’ve been stockpiling funds a few dollars at a time. Encouraging members to create separate savings accounts for emergencies is a helpful way to teach financial preparedness in a way that is relatable.

That emergency fund can be used for sudden changes in job status or pay, sudden expenses like replacing a totaled car, or paying for medical emergencies. When you phrase it as a series of probable bumps in the road, rather than an “in case a tornado or hurricane wipes out our house”, emergency funds start to make more sense to your members and become a valued service and insight you are offering them.

As for natural disasters specifically, it’s also good to inform credit union members that they should keep a small stash of cash at home, in the event that power in the area goes out and ATM withdrawals are not an option.

Budget What You Have

Budgeting is an elusive concept to many Americans. In fact, an Intuit survey showed that 65% of Americans have no clue how much money they spent last month.

But that doesn’t mean you should jump right into a hyper-detailed budgeting strategy. Just like learning to read, you don’t start with an entire book. You move through each letter, and then on to words, sentences, paragraphs, and so on.

Incorporating budgeting strategies a little at a time can help your members learn basic financial preparedness and planning, which can improve their financial stability little by little. Younger generations have previously been reported as not financially responsible, and you can’t teach that responsibility overnight. Creating budgets for small things, like groceries or streaming services can help members recognize and identify areas in their life that could use a good budgeting once-over.

Mitigate Debt

The COVID pandemic caused more than 51% of adults with credit card debt to add to their balances from March 2020 to January 2021.

In leaner times, financial goals should shift from growth and expansion – new house, newer car, impulse purchases on Amazon – to debt mitigation. If credit card debt is trending upwards, it’s important to revisit that budget, maybe cut out a few of the less essential expenses and make some goals to pay off credit card debt. For Millennials and Gen Z, offering these insights through your credit union is a great way to appeal to this very debt-conscious demographic.

Ensure Quick & Easy Access to Financial Information and Services

As a result of the pandemic, more people are using online banking services than ever before. Credit unions that wish to see success in a post-pandemic world need to be implementing and troubleshooting more digital services and offerings so as to keep up with the demand that is now present for these contactless banking options.

IMS Integration is here to help you optimize your credit union’s website with Web Loan Applications, Online Account Opening, and so much more.

Contact us today for more information about our credit union solutions.


2020’s Digital Push May Mean Future Security Risks

 

In 2020, credit unions prioritized service over expansion. But creating new digital solutions for members and employees was a whirlwind of uncertainty and this year, leaders will need to stay extra vigilant when it comes to credit union cybersecurity.

Now, many credit unions are focused again on expansion. 2021 looks to be the year 2020 was meant to be, in terms of growth. For this to happen, however, credit unions must protect themselves from cybersecurity setbacks. Here’s why:

Credit Union Cybersecurity

Your credit union, just like any other financial institution right now, has likely checked and rechecked your credit union cybersecurity solutions and protocols in the wake of rising fraudulent activity and cyber breaches taking place all over the country.

Credit union IT professionals have been working tirelessly for the last year to ensure all firewalls and anti-malware programs are present and running on all devices in your network.

The good news is, in most cases, your credit union is at low risk of being breached through your many security systems and protocols. But there is a chink in your credit union’s armor – and it’s your employees.

The Chink in Your Credit Union Armor – Your Employees

Your employees are one of the best assets your credit union has – and unfortunately, they are also often inadvertently to blame for cybersecurity breaches.

According to Varonis, 95% of cybersecurity breaches are caused by human error. And in the last year, your employees have been thrown out of their element and into new remote and hybrid work models, which increases the chances of a breach.

Even if your employees are only performing their work on approved devices, it’s still vitally important to continue educating them on new threats and how to avoid them.

Sending alerts, reminders, and educational material about phishing (one of the top methods employees fall for when it comes to cybersecurity breaches) is a great way to foster a cyber security-minded work culture and bridge gaps in tech-based employee skills.

Some common features of phishing emails to look out for include:

  • Offers that seem too good to be true. Phishing emails often have some kind of amazing, lucrative deal for recipients or even include information about a product or prize you’ve “won.”
  • Sense of Urgency. The point of these emails is to entice readers to “act now” or “click here” in a short amount of time or they risk losing the “special offer.”
  • Hyperlinks. Cybercriminals often use hyperlinks to mask the real link they want you to click on. To see if a link is legitimate, hold your mouse over the linked text to reveal the real link you will be navigating to. Be careful and check for typos in the link, as many phishing emails say they’re taking you to a legitimate website like “yourbank.com” but if you look closely, the “m” is really an “r” and an “n” set together to trick you into thinking the link is legitimate.
  • Attachments. If you are not expecting emails with attachments, or the attachment seems odd, don’t click on it. These attachments may have viruses or other malware that are released upon opening.
  • Unusual sender. The cardinal rule of employee-based cybersecurity is this – if you aren’t expecting an email from someone, don’t open it – especially if it has any of the abovementioned hallmarks of a phishing email.

Kick Start Your Credit Union’s Digital Expansion

Keep your credit union moving forward. IMS Integration offers premiere solutions for Keystone users:

  • Corelation Solutions: Skip a Pay, Reward Checking, and Online Courtesy Pay+.
  • Infuzion: This powerful tool was developed to streamline complex functions without spending hours developing scripts.
  • Web Loan Applications: Loans are critical to your credit union’s success. Enhance your member experience by implementing our online loan applications system, which tightly integrates with KeyStone core.

If you want to explore our offerings further, or you have questions about our solutions, contact us today.


2020 In Review for Credit Unions

 

The pandemic and other disasters caused a lot of uncertainty for your members and employees this year. As 2020 comes to a close, it’s important for leaders to review what they’ve learned so they can prepare for 2021. 

Here are the top insights credit unions have learned this year:

Members Need Digital Experiences

When the world locked down and started working remotely, members flocked to your credit union’s digital services. What was once seen as conveniences became needs, but your members still craved customization and personalization through your digital services and remote communication styles. They demanded improved digital experiences

In addition to increased phone volume and, potentially, the unveiling of video chatting at your credit union, your members increased the use of your website and mobile app. Website accessibility became even more valuable to serve more of your members.

As we’ve said before, “The digital member experience needs to be as close as possible to an all-encompassing, no limits, one-on-one discussion about the many products and programs your credit union offers.”

You may have seen a need to improve your software and digital infrastructure throughout this season. But those improvements don’t end with 2020. It’s imperative that credit unions continue to optimize the digital experience for their members on an ongoing basis. 

Related resources from our sister company, Information Management Solutions:

Cybersecurity is Increasingly Important

Credit unions across the nation, among other businesses, are finding that cybersecurity is critical for the well-being of their business and to keep their members’ data secure. 

We’ve known for a while that cybercriminals don’t discriminate who they attack and that not all cyber threats have malicious intent, but this year has made it even harder for smaller credit unions to keep up with the security demands placed on them, especially when transitioning to WFH environments. 

We previously summed this up as “Cybersecurity in 2020 is even more important than it was in past years because financial institutions can’t afford to be breached or hacked during these uncertain times.”

At the end of this year, one thing is clear: if your credit union hasn’t already, it’s time to strengthen your cybersecurity initiatives. 

Related resources from our sister company, Information Management Solutions:

Members Require a Better Experience

Your members want more. Their needs are always changing. As younger generations join credit unions and as time moves forward, member expectations change. This is especially true for 2020 as members’ needs changed practically overnight.

This year, credit unions helped their members use self-service options and embrace digital services. Your employees quickly felt the loss of that in-person community that is created within a normal credit union environment – and everyone on your team knew that many members felt the same loss.  

Customer service became less about benefits and more about personalizing the customer experience, even while working remotely. As we prepare for and head into 2021, it’s important to continue improving the member experience across the board. 

Related resources from our sister company, Information Management Solutions: 

Prepare for 2021

At the end of the day, your credit union is constantly working on ways to better serve your members. Members continue to be the most important focus for a credit union’s efforts, from the leadership team to each member service representative. For this reason, all of these insights that credit union leaders have learned over the year are important to take into 2021. 

Like you serve your members, our team at IMS Integration is here to serve you. Contact us to learn more about how we can help your credit union.


4 Trends Credit Union Customers Will Come to Expect

Neither big banks nor credit unions were prepared for the panic and major strategy pivoting that took place this year. COVID-19 has shaken nearly every industry to its core – so let’s focus on credit union solutions that will spell success in the future.

Identifying powerful trends can drive important changes that will set your credit union ahead of that elusive, ever-changing curve of tech, customer, and financial landscape changes. Modernization has not always been a top priority for credit unions, which typically have done more business with Gen X and older members.

However, at the start of the pandemic everyone rushed to their banks to take out as much cash as possible, in preparation for the shutdowns – but a few weeks later, according to UCCU CEO Steven Stapp, “suddenly all they want is the card.”

Customer needs are changing more rapidly, which means your credit union’s response has to keep up with these quick changes.

Focus on the Customers and Their Need for Great Contactless Experiences

Contactless experiences are an emerging trend that will likely stay around. Customers are moving away from credit cards, spending, and in-store shopping and now prefer debit cards, saving, and perusing online stores.

Giants like Amazon, who have all but perfected the customer experience, are skewing user preferences towards that model. Now, online customers are expecting easy, lightning-fast service with top tech.

This also means that real-time assistance with customer issues is a luxury no longer – it is a necessity for your Millennial and Gen Z customers, and it’s becoming a strong preference for older generations as they are learning to navigate this new digital-forward, post-pandemic world.

The challenge for credit unions moving forward will be tailoring their approaches and offerings to each CU’s region and specific demographics.

Meet Demand for Faster Payments

Fast service also means faster payments. With in-person visits being discouraged, the time between a transaction request and its posting or transfer can no longer be held up by days, as has been standard in the past.

“Differing member needs and expectations will impact each credit union’s choice of a payments solution, but noted there are four key experiences and procedures that all credit unions should keep in mind,” according to this recap of a PSCU white paper.

Those four things are:

  • Member experience and design – responsible for account controls, contact strategy, and instant issuance
  • Operational rigor – things like authorization strategies, general ledger practices, and liquidity management
  • Enterprise fraud management – changes to authentication, dark web monitoring, and real-time analytics
  • Compliance – includes consideration of changes to exception processing, payment scheme rules and regulations

Take Advantage of Outside Specialists

Credit unions and their employees should be focusing on customer-forward solutions, not on background tech and applications.

There are many third-party options for things like core hosting, payment delivery systems, and the like. Taking these burdens off your staff can free up time and energy for optimizing other areas of your member experience.

CUs Must Be Proactive to Beat Out Big Banks

Historically, credit unions have been slower to react than big banks when it comes to implementing new technology and processes. If your credit unions can adapt and innovate quickly, they can capture a lot of new customers. An essential part of this rapid implementation can be coupled with the previous trend – outsourcing intricate niche operations to companies with experience and optimized solutions.

Partner with IMS Integration

At IMS Integration, we can create tailored software solutions for your credit union. Contact us to learn more about how we can help you.


Leading During the COVID-19 Crisis

 

Credit unions are playing a critical role in supporting its members and the community during the COVID-19 pandemic. In many ways, credit unions are financial first responders for workers, businesses, families and communities to help weather the crisis. Although COVID-19 presents new challenges to how we operate, the same principles of leadership during a crisis remain the same. Your members and employees are looking to you for information, support and guidance during this time.

While we are still trying to determine what the long-term implications of where the pandemic will leave us, we know that every crisis has a beginning, middle and end. The future will leave us in a different state. It’s important to remember that the actions you take now can lead your organization to remaining resilient or on a path of chaos. 

With new information and regulations changing weekly, and even daily, it can be hard to sort through all the facts. However, there are steps you can take to improve the situation for your credit union.

Lead with communications

If you haven’t done so already, create a dedicated crisis management team. This is where you implement any emergency or disaster planning, preparation and testing to ensure operations run smoothly. A dedicated team will also be responsible for developing a protocol to monitor and report newly released information or regulations from all levels of governments. Knowing what’s happening in real time helps credit unions determine how to share updates with all employees and members. 

Members of the team should also be trained on executing the plan. There’s a lot of misinformation floating around, and your team should be helpful in sharing reliable information. Not only will this help your staff understand what’s happening, it will also ensure you’re providing the best service to members. Remember, always be transparent about what you know and don’t know. 

Collaborate with your team

Due to social distancing requirements, many of us are working from home – posing a different challenge trying to navigate remote working solutions. With teams split across various home offices for the foreseeable future, communication and collaboration can become strained. 

Whether it’s branch managers, human resources, IT or your legal team, COVID-19 will impact how work gets done. Additionally, credit unions are working across virtual environments to serve members. It’s essential to communicate more than you did before. Send more emails, establish regular meetings internally and with external partners so business runs smoothly. It may seem annoying at first, but having a clear flow of information keeps everyone on the same page.

Things are changing rapidly, so staff should know what’s coming down the pipeline and why decisions are made to avoid conflict. Selecting members from core operational teams for the dedicated COVID-19 team is another way for departments to make decisions and work together for a more effective response.

Plan for the unexpected

In one month, the financial world has experienced a level of disruption that will change the way we do business moving forward. The way we work and how members manage their money has changed. And the reality is we really don’t know how long it will take to recover from the pandemic. It’s best to prepare for the unexpected. 

Credit unions have to be more flexible and adapt to the times to support the needs of its members and take care of staff. Look for opportunities to reinvent how you use data and human resources, deliver digital solutions and engage with members. 

It’s clear the pandemic will create a new way of doing business. Let’s talk about tools that are available to strengthen and grow your credit union.