Skip to main content

The Lending Lifeline: How Credit Unions Can Drive Growth in Today's Financial Landscape

By: Danny Phillips

Lending is much more than a default service offering for credit unions. It's the lifeblood that fosters growth, sustains financial health and enhances member service.

Credit unions, by their very nature, have always been institutions that focus on their members. In this ever-evolving financial landscape, the importance of lending to credit unions cannot be emphasized enough. Lending, beyond being a source of revenue and driver of deposits, fosters trust and relationship-building with members while cementing a credit union’s reputation in the community.

The Significance of Lending to Credit Unions

There are two distinct types of challenges for credit unions when it comes to bolstering their lending portfolios.

On one hand, credit unions must strive to attract consumers equipped with the financial resources to be high-deposit new members. On the other, there's the ongoing challenge of nurturing existing member relationships, aiming to uplift deposits across accounts. And like all enterprises, credit unions face the constant pressure of ensuring every marketing dime spent yields substantial returns.

So, how does lending rise to the occasion?

Lending serves as a cornerstone for members, offering them financial flexibility and enhancing their trust in the credit union. Additionally, in today's climate of escalating interest rates, there's an underlying concern for credit unions: How can they drive deposits to counterbalance low yields?

Given that lending inherently drives deposits, its importance is magnified. Now, more than ever, credit unions must place lending at the forefront of their strategic goals.

Unlocking the Potential: Making Loans More Accessible

Boosting loan activity begins by understanding and responding to member needs and preferences. This means simplifying application processes, personalizing loan offerings, and leveraging digital platforms to provide seamless experiences.

So, which tactics should credit unions adopt to drive loan activity?

  • Offer tailored promotions: Promoting specialized lending promotions or loan types to specific member segments can lead to increased uptake. For example, introducing loan products that cater to emerging member needs, such as green loans for sustainable initiatives, could work well in areas with active sustainability projects and efforts.
  • Deepen digital engagement: In today's digitally driven world, credit unions must harness the power of online platforms and mobile apps. This includes creating user-friendly portals where members can easily explore loan offerings, compare rates and initiate loan processes. Interactive tools, such as loan calculators and simulation scenarios, can provide members with valuable insights, guiding their decisions and encouraging loan uptake. Push notifications and personalized loan reminders can also prompt members to consider borrowing, especially when special rates or offers are available.
  • Launch educational initiatives and workshops: Knowledge is power. It also empowers decision-making. Credit unions can host webinars, workshops and online courses aimed at financial literacy. Topics can range from understanding credit scores to the benefits of different loan types. By positioning themselves as a trusted source of financial knowledge, credit unions not only reinforce their relationship with members but also cultivate an environment where members feel confident to take out loans. Partnering with local businesses or community leaders for these initiatives can further expand reach and impact.

Introducing 1-Click Loans: The Future of Lending

In addition to these tactics, credit unions can use innovative solutions like 1-Click Loans to bolster loan activity.

1-Click Loans reimagines the lending process, placing convenience at its core. By pre-approving members without the rigors of an application, credit pull or underwriting, credit unions extend trust and efficiency. 

So how does it work? Credit unions curate a list of members meeting institution-specific criteria, and these members are presented with an offer directly within their online banking. One click later, the loan is accepted with funds instantly available.

Calhoun Liberty Credit Union (CLCU) in Blountstown, Florida, is a great example of how to use 1-Click Loans successfully. The institution increased its unsecured loan portfolio by 7% in one month with minimal manual work.

Shelly Burns, CLCU’s Chief Lending Officer, said the program empowers the credit union to grow its loan portfolio without growing loan production staff.

1-Click Loans not only simplifies the lending process but also amplifies a credit union's potential to drive growth. It empowers members with instant financial solutions, strengthening their bond with the credit union. Simultaneously, it boosts the credit union's loan activity, driving those all-important deposits.

Explore the 1-Click Loan Revolution with CU*SOUTH

In the dynamic world of financial services, staying ahead means embracing innovation. There's no better time than now to explore 1-Click Loans. Reach out today and discover how we can help drive growth in your credit union and make it easier for your members to get the financial help they need.
 

Danny Phillips is Vice President of Client Experience at CU*SOUTH. Danny brings more than 20 years of experience in consumer direct and indirect lending and more than 10 years of credit union industry experience to his role. Prior to CU*SOUTH, Danny was the Executive Vice President of a 25,000-member, $250 million credit union in Michigan.