Lending Trends in 2021 & Beyond

 

The benefits of digital lending are undeniable, and as more lending services enter your members’ market, it’s crucial to be aware of the latest trends in lending. Lending programs are being offered by more than just banks and credit unions – retail giants like Amazon are continuing to expand their financial services, aiming to create all-inclusive experiences for their current and potential customers.

Let’s discuss some of the latest lending trends in 2021 and beyond.

Lending-as-a-Service

With the emergence of fintech as a means to offer cheaper and faster online options for all banking needs, creating space in the industry for Lending-as-a-Service.

Lending-as-a-Service allows companies and brands to offer transparent, user-friendly financing solutions, rather than partnering with a financial brand to do it on behalf of the brand. This has recently made waves in the online automotive retail sector.

By using APIs to tie online applications to one another, your credit union’s lending services will need to continue integrating and streamlining lending services to capture more tech-savvy members of all ages who have embraced new digital solutions as a result of the COVID-19 pandemic.

Changes in Lending Trends Due to Member Behavior

As younger generations begin taking up more market share in the lending industry, your member needs also change. For Millennials and Gen Z, generations who spent much of their childhood and adolescence in the shadow of the 2008-2009 financial crisis, avoiding debt is a top priority. And many of these people are willing to take out loans to consolidate and pay down their current debt. This means they are more debit card-forward than your credit union’s older members.

This change in member behavior comes with higher demand for offerings that provide lending opportunities with fewer features attached that also mitigate the incursion of additional debt.

Increased Solutions for Bridging Business Capital Gaps

According to FintechTris, another big shift in the lending world includes attempting to bridge the gap in business credit offerings: “Working capital loans, equipment financing, and lines of credit are now readily available for this user segment through non-bank alternatives.”

There’s also an increase in companies looking for partners willing to invest in unsecured offers. Companies are entering the lending industry by allowing borrowers to use refundable security deposits as collateral for loans, which then allows them to receive their deposit back after 6-12 months of on-time payments.

Fighting Fintechs for Market Share

Credit unions are faced with growing competition from fintechs, and the solution will have to be focused on transparency, flexibility, and peace of mind, according to CUNA.

The key to success in this changing lending climate is to leverage your credit union’s reputation and commitment to providing high-quality member experiences by creating great lending opportunities and offering sound financial advice as we move into 2022.

The Future of Your CU – Your Way

IMS knows CU-specific tech solutions the way that your credit union knows exactly what your members need – from financial advice to insight on lending trends. Let us help with your virtual desktop and private cloud needs.

Contact IMS to set up your consultation or call 888-356-6043 today to explore our solutions and services.


The Future of Credit Union Technology

 

The last year or so has become the catalyst for credit union technology growth and change, driving member services toward digital solutions faster than they have ever done before.

Streamlined service and cutting-edge digital experience is no longer a luxury for businesses, it’s a necessity. Let’s discuss the future of credit union technology.

2021 Priorities: Cloud, Data, and Analytics

Cloud, data and analytics are the top priorities this year for credit unions looking to make big changes to their member experience standards, says the Credit Union Times.

Cloud solutions are quickly becoming vital to businesses across nearly all industries, as work-from-home opportunities increase in popularity. The ease of storing data in an easily accessible place no matter your physical location is a big boon to a credit union’s tech future.

And since so much activity has moved to online platforms, data and analytics are being collected and leveraged in more useful ways. For your credit union to better serve its community, you must know who you are speaking to and working with. Analytics offer hosts of great insights that can help with everything from choosing or updating hours of operation to running multi-audience marketing campaigns.

Bridging Accessibility Gaps

Credit union technology also proves advantageous for individuals who are differently mobile and more digital-minded. By offering digital credit union solutions, you are improving the accessibility and safety of your brand. Whether your members’ ability to come into your physical branch locations stems from a handicap or illness, lack of vehicle access, pandemic restrictions, or a preference for online dealings, credit union technology offers new ways for people of all ages and from all localities the opportunity to take advantage of your membership and services.

Kirk Drake of Credit Union 2.0 says this: “In the credit unions, not that they don’t want to make money, it’s about member service, we really want to get the member value in that ecosystem and they really speak a very different language about their mission purpose, values, and what they’re trying to do.”

Preserving the Partnership

Members don’t choose credit unions for the fancy tech or big bank offerings – they do it because being part of a credit union means you have a partner for your financial life and wellbeing. While technology is changing how that partnership looks, it’s not changing the impact partnership has on the member experience.

By partnering with technology, credit unions can provide end-to-end services for their members. Multimedia resources, chat and video conferencing appointments, and so much more can be built into your digital presence, to help ensure that your credit union and its partnership with your members remain meaningful and provide quality interactions.

Contactless Trends

Pymnts.com reports that credit union members have a high desire for contactless payments. And though this trend started long before the events of 2020, due to the rapid digitization happening across all industries, 98% of POS devices being shipped out now are enabled with contactless functionality.

For CUs, this means focusing on streamlining. It also means taking the time to understand member preferences and offer personalization that suits a wide variety of member habits and requests.

Upgrade Your Credit Union Technology

Your credit union’s member experience is paramount to your success. Information Management Solutions (IMS) has years of experience providing data center services to credit unions all over the U.S., and we look forward to serving your unique needs.

IMS has virtual private cloud services and solutions like core hosting, virtual desktop, disaster recovery, and more for your credit union. Contact us today for more information.