consumer lending: transformed

The Financial Brand asked 300 bank and credit union marketing executives to share with us the

biggest challenge they face in 2014...

Source: The Financial Brand - February, 2014

“Sustaining loan growth given that the refi boom has for the most part passed.”

— Bank VP ($1 billion to $10 billion in assets)

Source: The Financial Brand - February, 2014

“Keeping up. Offering all the technological conveniences consumers demand.”

— Credit Union VP ($1 billion to $10 billion in assets)

Source: The Financial Brand - February, 2014

“Access to big data to create and measure effective online campaigns and next best offer marketing.”

— Bank Director ($10 billion to $50 billion in assets)

Source: The Financial Brand - February, 2014

“Interpreting the vast amount of data that we have and turning it into actionable strategies.”

— Credit Union VP ($100 to $500 million in assets)

Source: The Financial Brand - February, 2014

“The move to electronic/mobile services while maintaining excellent service in traditional channels.

A big part of this is recognizing and offering consumers what they really want, and not making assumptions based on age/economic demographics.”

— Credit Union VP ($500 million to $1 billion in assets)

Source: The Financial Brand - February, 2014

Source: Bank Marketing Strategy, Retail Banking Trends and Predictions for 2014 (survey)

Drive-to-Digital Impacting delivery, marketing and service usage

Payment Disruption New players, technologies and innovations

Focus on Customer 3.0 Digitally astute, social and yearning for insight

Breaking Down Silos Product and data silos begin to crumble

Simplifying Engagement Removal of friction and steps to engage

Improving Contextual Experiences Leveraging data for improved service

Priorities & Themes for 2014

Focused on Customer Growth & Cross Sell

The growing importance of customer-centric banking strategies is evident as 62% of survey respondents cited mobile banking, payments and data-driven sales and marketing initiatives as the IT-related projects they will focus on most for customer growth.

Source: KPMG

The goals are clear.

But our methods are antiquated.

Financial institutions spend billions each year mining data for “intelligence” that they can use in attempts to deliver a loan offer at the opportune moment.

Propensity modeling

Segmentation strategy

Predictive analytics

Event triggers

Less than 2% of the time they succeed in capturing the attention of an interested consumer…

At which point they present a loan application.

Loan applications suck.

“Help - my customers are moving to mobile in droves!”

Now what?

Meanwhile…

The industry’s response?

Simplify the application.

Strip it down. Pre-populate it. Dress it up in a fancy outfit. Cram it on a 4” screen.

And guess what?

It’s still a loan application.

Here’s the really absurd part…

Financial institutions have tremendous amounts of customer data at their disposal. In most cases, they already have all of the information necessary to make a responsible loan approval decision.

So why do they still make customers jump through unnecessary hoops?

Don’t tell them what they want.

Listen.

Don’t wait for them to come to you.

Use your knowledge, your data, to better serve their financial needs.

Stop investing in educated guesses, and start investing in relationships.

Empower the consumer with

Perpetual Loan Approval Status

• No more loan applications

• Financial Institutions benefit from deeper customer relationships and “Top of Wallet” advantage.

• Preemptive Lending Strategy Their customers know where to turn for credit when they decide to pull the trigger on their next big purchase, with convenient pre-approved access to highly-personalized offers at every touchpoint.

Consumer Lending Strategies

SIT AND WAIT o Initiated by customer (fundamental flaw)

o Application required

ASK FOR THE BUSINESS o Promotions (seasonal or need driven)

o Targeted pre-approvals & pre-qualifications

o New account cross-sell (application required)

EMPOWER THE CONSUMER o Comprehensive Pre-screened Lending (CPL)

o NO Applications

o Perpetual loan approval status

o Multi-product

o Omni-channel

o Customer-centric

o Online applications

o Instant approval

o Many providers

o Little differentiation

o Little/no competitive advantage

o “Spray & Pray” marketing initiatives

o Advertising & promotions

o Teaser rates & incentives

o Segmentation & targeting strategies

o “Instant” applications w/ cross sell

o Constant/consistent messaging

o All touchpoints

o All direct channels

o Instantly actionable response

REACTIVE

PROACTIVE

PREEMPTIVE

Comprehensive Pre-screened Lending (CPL) CPL Strategy: Utilizing advanced customer relationship profiling and risk-based pricing criteria to pre-approve individuals for a personalized array of loan/credit products, then managing simultaneous communication and acceptance of the multi-product offers at all key customer touchpoints ― online and mobile banking, direct mail, email, in-branch and at the call center.

CPL can be thought of as a personalized, pre-approved rate sheet, granting consumers perpetual insight into their personal credit worthiness and buying power. Pre-approved funds are just a click or a tap away. Anytime, anywhere. No loan application necessary!

Preemptive Lending: Over time, customers become conditioned to know that they have credit conveniently available when they need it, positioning the FI as their customer’s primary lending resource.

Does it Work? You Bet!

Award Winning pilot program at a $2 billion FI achieved more loan volume in its first year

than traditional methods had yielded in the previous four years combined.

Response rates more than doubled, and acquisition costs were

cut by nearly 80%.

― CUneXus client

Online Banking SSO Interface 1-Click Access to Pre-Approved Loan Offers Inside Online Banking

Significant Revenue from Mobile? Absolutely! Mobile Offer Acceptance: Easy as…

― CUneXus client

ONE-STOP DIRECT MAIL & EMAIL FULFILLMENT SERVICES

PROVIDED BY PSB INTEGRATED MARKETING

Data Processing

Collateral Design

On-Premise Digital & Offset Presses

On-Premise Mailhouse

Cross Sell Interface The Ultimate Sales Tool

Simple Powerful Effective

L E A R N M O R E A T

C U N E X U S . C O M

W i n n e r o f t h e D E M O v a t i o n C h a l l e n g e J o i n u s f o r a l i v e d e m o a t

M a r c h 3 - 4 , 2 0 1 4 • S e a t t l e