I just finished preparing a presentation for the upcoming Lending Council Annual Meeting (insert shameless plug here.) As I was doing my research for the presentation, I ran across the article, Building Members from Indirect Borrowers in the Idaho Credit Union League’s August 2007 newsletter that peaked my interest.
The article covers a portion of CUNA Mutual’s Discovery Conference in 2007, where Bill Jolicoeur, vp and executive product leader at CUNA Mutual, discussed the opportunities indirect lending presents to credit unions since roughly 40% of existing loans in 2007 were made to indirect borrowers.
It’s tricky, of course. As the article points out, these members don’t switch over to other services easily… either because they are wed to their existing financial institutions and/or they don’t know that your credit union can do more for them.
But Jolicoeur suggests that the opportunity really lies in what he calls, “data mining,” according to the article. Data mining is essentially taking a look at the indirect borrower’s financial information and targeting messages for products and services that meet their needs, like loan consolidation. Here’s Jolicoeur’s point…
“Data mining allows you to look at what they have outstanding,” said Jolicoeur. “You have to be able to show them there’s a really good shot at helping them financially.”
I’d like to take this a step further. I think indirect borrowing offers an incredible opportunity for credit unions who want to better serve 18-to-30s.
When it comes to attracting young adults, making the most of every opportunity is just as important as relevant ad campaigns, messaging, and Web sites. In this case, the opportunities are presented through indirect borrowing & Jolicoeur’s concept of data mining.
Many of these indirect borrowers are entering their prime borrowing years, and the credit union has an opportunity to examine their info to determine where the credit union can help. Once that’s established, it’s a matter of developing your relationship with these new-found young adult members and proving to them that you have what it takes to meet their needs. Follow up with a phone call, relevant messaging, maybe even point them to your Web site if it has the right information presented to meet their needs and answer basic questions.
No, it’s not simple. No, it’s not the “silver bullet” most folks are looking for. It is, however, another tool in the credit union toolbox for better serving young adults.
Thanks to copyblogger for the cool pic