Lending Perspectives: Is your credit union prepared for attacks on the model?
To win against many factors threatening credit union loan programs and portfolios, keep your focus and stay on the offensive.
It may be because I’ve been in this business long enough to realize that building and managing a top-quality loan portfolio is tougher than ever. It may just be that I long for the past when lending was simpler. Regardless, it’s clear to me that there is a wealth of attackers on our lending business model today, and we have to be more diligent than ever.
Digital Attacks
COVID-19 has accelerated the digital transformation of financial services. In the past 12 months, Ent Credit Union has experienced significant growth in the percentage of its consumer loan applications coming from the digital channel. Not only are we seeing more mobile and web applications, we’re also experiencing stronger application quality. While most credit unions have developed some level of digital lending capability, it’s likely we’ll always be playing catch up to the fintechs.
While the fintech lending battleground has primarily been focused on personal loans, more and more new lenders are focused on auto and home equity loans, on top of the competition for mortgages from Rocket Mortgage/Quicken Loans. There is no such thing as a “safe” portion of our portfolio!
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