Credit Union Geek

Marketing, Strategy, and The Force by Joe Winn

Tag: lending (page 1 of 2)

Data Security: Car Edition. Really.

Originally published on CUInsight.com

When you hear “data security”, what comes to mind? Your laptop? Phone? Internet of Things “smart” oven? (I’d hate to let a hacker know how badly I burnt that casserole)

Anything else? How about your computer on wheels?

Modern cars are rolling supercomputers. They have dozens of systems collecting unique data to make your driving experience safer, more enjoyable, and sometimes more distracting. For example, the traction control computer collects information on road conditions hundreds of times a second. However, it’s probably not a source of identity theft (though what could be learned from its records would surprise you). Nor is the network of proximity sensors to help you navigate tight areas.

Your car does contain a number of personalized systems. Let’s look at the big ones:

GPS: Your car knows where it is at all times, where it has been, the paths you take, and even the speed at which those drives were made.

Bluetooth: When you pair your phone, it does more than share a 4-digit code. To automatically reconnect, the car remembers your phone’s unique ID. This isn’t a huge privacy issue on its own, but today’s cars save far more. To make dialing easier, a lot of systems import your contacts and synchronize your text messages. No big deal, just your entire phone book and call/text history.

HomeLink: Do you have buttons on your mirror or visor? Do they open your gate/garage? Then you have HomeLink. These can even support turning on/off lights, though new smart integrations have made that a bit redundant. Combined with the GPS history, this is the biggest privacy risk in your car. The former tells anyone in the car where your house is located. The latter Opens. Your. Home.

Those are the big three. Others vary by manufacturer and features. Things like a custom entry code (many Ford vehicles still use this feature…do not choose a birthday!) are seen on occasion. App integration is becoming more common, making your phone an advanced car key.

So, what of all these features? I’m a huge fan of integrations which make sense, and I use them often. However, I also know there is a level of security necessary. To add a small degree, I never program my actual home address into the GPS. The “point” is around the entrance to my community, not in my driveway. Do you really need those last 4 turns? Granted, someone could just find my address on the registration, but I’m hoping a potential thief is just too dumb to consider such an option. Why make it easy? Note: My garage opener doesn’t reach from the home “point”.

It’s good to know what these features can reveal while you have the car, but what about when you sell it?  Given the privacy/security risk inherent, I find it almost criminal that an easy “I’m selling my car, delete everything” button is not available in every car. For mine, I’ve had to do the following:

  1. Delete my phone pairing from the car.
  2. Remove the “Home” location in my GPS.
  3. Remove all recent waypoints in the GPS.
  4. Reset the HomeLink buttons.
  5. Cancel/transfer satellite radio service (technically, with an active Radio ID, one can use a phishing strategy to get my personal information from SiriusXM)

You’re right, there is no direct credit union guidance in this post. However, given my recent experience in buying a new car, I felt it necessary enough to share. Be honest, how many cars do you think are traded-in with the prior owner’s home address and garage code?

Help protect your staff and membership by sharing this with everyone! (And along with every booked loan)

Image credit: That’s me, while owning two cars.

Oh No! Millennials Aren’t Doing What We Expected!

The average age of a credit union member is 47. So it stands to reason the industry has a love affair with those of a younger demographic. If only they would talk about it!

Truth be told, a day cannot go by without seeing at least one discussion of Millenials and credit unions. Whether it be embracing technological solutions or offering a streamlined approach to lending, everyone has the answer to connecting with this essential generation.

There were challenges, however. Millenials don’t buy homes (mortgages), they don’t use credit cards, avoid owning cars (auto loans), and have no intention of changing. Like the disappearance of Tamagotchi pets, the needs of a generation had changed. Face it, it’s hopeless to even bother being in the banking industry anymore. We’ll be lucky if we can hold some of their meager savings.

Except all of this turned out to be false. When the average Millenial left school, they walked into a global recession, high unemployment, a banking sector in disarray, Wall Street in free-fall, and continuous threats of government shutdowns. Not an encouraging environment to make a stand!

So, they waited. Putting off moving out and getting new wheels for a solid career path, you can almost call them the Hesitant generation. Sure, adoption of technology, in every form, was rapid, but they also were the first to grow up with the Internet. It was a given they would be comfortable amongst cyberspace. The real world? Not so much.

Until things improved. Like now. Credit is more available and companies are hiring. Growing incomes situated them in up-and-coming urban centers. Big cities, sure, but also the smaller metro areas (like our own award-winning Fort Lauderdale) are experiencing dramatic influxes of young professionals. “Yeah, but in the city, they don’t drive, and they rent condos, so nothing changed.” Except not.

Millenials have grown into the second largest car buying group, behind their parents, the Boomers. You were right, they want the technology, and cool for these people represents efficient and modern. Out of reach of most buyers, the Tesla Model S still stands as the pinnacle of “cool”. No wonder other carmakers are pushing their own plug-ins, electric, and other forward-looking models.

They’re also buying homes. Renting was a necessary evil, and also helpful for a rapidly-shifting work environment. Now, denizens of the Millenial generation are able to “settle down” just a bit, and that comes with buying property.

Credit card usage is down, that’s accurate, but debit cards are embraced wholly. I see this as a financial literacy issue more than anything, which credit unions are ideally suited to address. Also mentioned in a recent post was the activities of CU Student Choice, helping CUs become financiers of student loans.

So this Millenials group…where do credit unions fit? Fund student loans, help them get started with debit cards, for a start. Be there for their new car loans, then help through the first mortgage. By providing time-honored service, coupled with the offerings people today expect (mobile banking, remote check deposit, online loan application, and compatibility with the latest must-haves), any credit union would be setting themselves up for a generation of success!

Sources: http://www.chicagotribune.com/classified/automotive/sns-wp-blm-news-bc-autos-millennials25-20150425-story.html, http://www.cuinsight.com/make-new-friends-reaching-the-younger-demographic.html

Image credit: https://bluesyemre.files.wordpress.com/2012/12/generation-x-y-z.jpg

One Third of Them Means Half of This?

Originally published on CUInsight.com

Keep me honest. I’ve been known to ask for help in finding my sunglasses…while I’m wearing them. Hey, they’re lightweight and comfortable! So if I’m overlooking an important point, please guide me in the right direction. In this situation, I have a nagging feeling the industry is doing just that.

We’re talking auto loans. Or rather, auto loan funding.

If my data sources are correct, credit unions handle 16.7% of auto loans in America(1). Not too shabby. In fact, that’s a lot of loans, a whole bunch of cars, and millions of people receiving rates likely better than from a for-profit bank. Congratulations financial co-ops!

Hold off on swinging the “We’re #1” foam finger for just another minute. A previous post celebrated an announcement from CUNA of credit union penetration. 1 in 3 Americans. 100 million members. So why only 16.7% of auto loans?

Some digging ensued and it didn’t take long for the digital shovel to strike a proverbial wooden box. Upon opening it, I learned there was a leak in the ship.

Credit unions do, in fact, accept auto loan applications for 33% of Americans. However, only around half ever get funded. That’s 50% or 1 in 2 members.

What’s half of 33%? Not too far from 16.7%. Wait a minute, I’ve heard that number before! Isn’t that the total percentage of auto loans credit unions hold in the market? Weird, right?

Could it be that credit unions are receiving all the applications they need, yet, for various reasons, are losing out to other lenders? Sure, you have high underwriting standards, and not everyone qualifies; you don’t need to rationalize to that end. However, there is still a loss. You’re putting effort into underwriting these loan applications; be bothered by losing half of them!

From reducing flipped loans with the convenience of share drafts to the personal touch of a member representative calling on every loan approval, there are credit unions making strides to confront this issue. What are your numbers, and could reducing a portion of the lost half make a difference in your 2015 goals?

Disclosure: My company works with credit unions to help increase booked loan percentages as well as their total auto loan volume. It is in our, and the industry’s, best interest to identify sources of lost income and maximize growth for institutions and their members.

Image credit: http://sme-blog.com/files/2013/09/TSBB_Development-440×402.jpg

(1) Experian, Q3Y14

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