Redefining the Consumer Lending Environment


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Successful credit unions are constantly embracing new economic trends that are significantly transforming the industry. Today, members of all generations prefer fast, low-friction transactions and the ability to pass the credit approval process, forcing credit unions to view members as more than a credit score. traditional credit.

Retaining and attracting new members in today’s consumer lending environment relies on integrating digital solutions into credit union processes, delivering lower friction transactions and embracing employment evolution .

Importance of cloud data for credit unions

Credit unions work diligently to eliminate the tedious process of pulling data from multiple sources to prove a member’s trustworthiness when borrowing. To do this, credit unions use, among other things, cloud-based digital verification solutions.

Using cloud-based technology can help credit unions create a unified lending landscape that provides greater transparency and more transparent transactions with each of their members. Accessing member data from a cloud-based environment can also improve data security and provide fast digital access to historical member records. The result can be reduced risk and default rates for the credit union, due to its ability to review complete records relating to the member, and improved processing speeds for the individual.

Moving from excessive paper-based processes to cloud-based digital solutions can allow credit unions to speed up the loan approval process, get a clearer view of member history, and adapt to changing ever-changing member needs and market trends. Cloud solutions also provide operations scalability to better meet member demands with minimal business disruption by allowing credit unions to focus resources on member engagement and initiatives that increase success rather than paper-intensive review processes.

Faster transactions: easier with reduced friction

Reliance on bank statements and authorized consumer accounts is quickly becoming obsolete methods of verification. Members are demanding a fast, less burdensome process that removes liability from them, streamlines checkout processes, and uses up-to-date data to meet their expectations.

Understanding the importance of automation in the credit union experience for all types of borrowers can lead to an overall improvement in the member experience. Leveraging the combination of digital and human interaction reduces the need to use timely and outdated paper-based processes. According to PwC, 17% of clients will abandon business transactions after a bad experience. Generating revenue depends on making the process as easy as possible for both parties, increasing product engagement, and delivering effective experiences.

It can be difficult to accommodate individual conditions and tailor experiences to accommodate new and returning customers. But credit unions that seek to be financially inclusive can appeal to diverse groups of borrowers from all generations by offering exceptional personal journeys, regardless of their credit history.

The gig economy is here to stay

The pandemic is also forcing everyone to consider the different ways new generations can earn sustainable income, forcing credit unions to reassess the importance of traditional credit scores for creditworthiness. Full-time employees sitting in a desk for eight hours a day are an outdated image of the workforce. Since the start of the pandemic, quit rates have increased by more than 20% among 30-45 year olds, according to harvard business reviewwhile all generations have embraced remote working and have free time to pursue additional projects.

The growing employment revolution is completely redefining what it means to maintain an occupation. As applicants move away from multi-year track records of job stability, credit unions must broaden their reach to identify low-risk borrowers. These changes do not affect consumers’ ability to earn income or pay their personal bills on time, and such members should not be denied funding due to traditional creditworthiness measures. Using instant cloud-based digital verifications of earnings and employment is a way for credit unions to gain a bigger picture to better assess an applicant’s ability to repay a loan. Consumers can now agree to be a sole proprietor or freelancer without raising a red flag for credit unions, finally escaping the traditional role of full-time or part-time employees.

Using technology can help credit unions keep up to date with changing member preferences and trends. Credit unions that make it a priority to attract a diverse group of members from all generations, regardless of their credit history, and to provide exceptional personal experiences, will meet the needs of today’s consumers.

Alison Heller Alison Heller

Alison Heller is Sales Manager – Consumer Finance, Verification Services at Equifax Workforce Solutions, based in St. Louis, Missouri.

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