CUNA Mutual: Delivering long-term value through digital lending

In its 2017 report, Getting a bang for your digital buck: In consumer lending, going digital is no longer enough,” PwC noted, “Lenders should no longer question whether or not to invest in digital; but focus on how to deliver long-term value.”

Most credit unions recognize the importance of digital; it’s the long-term value that causes angst. Developing and implementing a digital lending experience will be vital to remaining relevant and competitive as technology evolves.

A digital lending strategy that delivers long term value begins with three core components:

Your Member Experience
First and foremost is your member experience, which should be the focus of everything you do. As the world turns digital, member behavior continues to shift, presenting you with two challenges:

  • Member dependence on digital channels to manage financial affairs has put a premium on delivering a dynamic and integrated experience to meet heightened expectations.
  • Operating in a digital environment that members control makes it difficult to understand these expectations and how to best address them.

You begin tackling these challenges by leveraging the second fundamental element of a digital lending strategy.

Your Data
The digital footprint each member produces has grown exponentially over the last decade. The data contained in your systems, along with advances in analytics, give you the ability to develop insights into member preferences and behavior like never before. Think of your data as a roadmap to understanding not just what your members look like (demographics), but who they are, how they behave, and how they want to interact with you (psychographics).

Having an intimate knowledge of your members produced by these data-driven insights helps you move beyond segmentation and toward personalization. It also guides the development of the third fundamental element of a digital lending strategy.

Your Digital Technology
Your technology decisions shouldn’t be based solely on your internal needs or workflow. This approach puts your perspective before your members’, and as we’ve seen, your member experience should be the basis for everything you do.

Use the member insights gathered from data analytics to shape your digital vision. Don’t view lending as a process you manage from acquisition through servicing. Look at it through your members’ eyes, and focus on the customer journey, or, in other words, the steps they take to secure a loan. Your insights can help you evaluate how your members are engaging with you and guide the technology solutions you consider.

How do you know if you’re on the right path? Return to your member experience and look for changes in behavior: Are more loan applications being completed online? Have new pain points developed? Analyzing new data will give you fresh insights and validate whether you’re meeting shifting expectations.

In summary, member experience, data, and digital technology integrate through information, insight, and interaction to form the foundation of a digital lending strategy. Focusing on these core components can help you deliver long-term value for both your members and your credit union.

Shawna Bellone is a senior consultant, Business Transformation, at CUNA Mutual Group, the leading provider of insurance and financial services to credit unions and their members. In this role, Shawna is responsible for working with credit union partners to establish concept validation, and recruitment to pilot concepts for Lending Solutions.