LAS VEGAS — The good news: CUs set a new record for lending origination volume in 2013. The bad news: that's still not good enough. The answer: it's time to figure out how to "steal market share."

That was the message from Steve Williams, co-founder of Scottsdale, Ariz.-based Cornerstone Advisors during his remarks at the CU Direct Lending & Marketing Conference here.

"Credit unions came through the financial crisis and now are profitable," he said. "They have financial capital, but now they need strategic capital. They need a strong brand and business model, along with a culture of innovation."

In 2013 CUs originated $351 billion in loans, surpassing the record volume by 6.2%. Williams noted CUs financed $16 million in new auto loans last year, as auto lending grew 11.2%. CUs hold 6.8% mortgage market share, even though first mortgage originations fell 3%.

"We are doing OK, but not that great," he assessed. "We need to think big. How will we make money and disrupt the traditional banks? We need to steal market share over the next 10 years."

Mobile is not "something," Williams insisted, it is "the thing."

"Everything we do, we have to think about it in terms of the mobile framework," he said, noting predictions are U.S. mobile banking will triple from 2012 to 2016, with 96.1 million projected users. "Through this growth, the member experience still needs to improve. Members need to have a great mobile experience."

P2P Sites Changing Picture
As people change the way they shop for homes — using websites such as Zillow — Williams said it is likely to impact the way they shop for mortgages, as well. "People will use one click to look for a house and a mortgage."

Another new trend that is rapidly changing the face of how people obtain a loan: peer-to-peer (P2P) lending in the U.S. has skyrocketed — reaching $4.4 billion in 2013. There are pawn websites, such as, which Williams described as "mobile and upscale." Funding circles loan money to microbusinesses. For example, Kabbage makes loans from $500 to $100,000. CUs need to think about how they can compete with these very untraditional competitors.

Yet another tech trend is "big data." Williams said new data points when evaluating loans make the FICO score look crude and out-of-date, as there is a "lot more data about people" than what the credit bureaus collect. The next gen lenders are "data mashup hogs," he proclaimed.

Getting Better
As credit unions look to innovate going forward in that hunt for greater market share, Williams cautioned process improvement is a "ground war."

He listed a number of "mandates" to improve the loan process, from creating overall simplicity by prefilling host data and credit information to integrating with the overall member enrollment strategy.

Other tips:

  • Cross sales can be automated into the workflow.
  • E-signature can be part of the in-branch process.
  • CUs can brand their loan turnaround time.
  • In underwriting, CUs should target auto decisioning 50% of applications.

"There needs to be a four-way internal partnership: marketing, credit risk and underwriting, operations and IT, and sales and service," Williams said. "The future is now, it is about execution."

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