SAN ANTONIO—The success credit unions have had in indirect auto lending is impacting walletshare, according to one person.
Mark Hein, CEO of SWBC’s Financial Institution Group, told CUToday.info that many CUs will have to turn to outsourcing as one means of getting that new member share. Hein shared his thoughts as part of the CUToday.info series, “100 Million Members: Now What?”
Mark Hein
CUToday.info: Why are credit unions so good at signing up new members, but then not capturing wallet share from those new members? Is there a flaw in the process? Training? Culture?
Mark Hein: The main culprit to this is indirect lending, in my opinion. I believe that if you looked at the percentage of new members that are signed up via indirect lending, the number would be huge. At the dealership, the dealer is simply trying to get the borrower out the door with the vehicle. They do not really care about a lender’s wallet share. That leaves the credit union trying, after the fact, to “sell” the new member on the value of their services compared to the member’s current primary FI. In this case, you will need a compelling offer to make them change their primary FI.
CUToday.info: What can be done to improve wallet share capture among new members? Existing members?
Hein: There are many companies that are there to help do this. It means outsourcing some of the functions of a credit union. This can be a difficult concept in some instances. Many times, credit unions simply do not have the necessary staff to be successful at this and they have two choices: Outsource or try to do their best.