With all of the harsh winter weather making its way up the east coast due to the "bomb cyclone," we’d once again like to offer our well wishes to everyone affected. We hope you’re staying as warm and safe as possible.
While many people across the country are already looking forward to warmer temperatures and Spring-time weather, financial institutions are already off and running when comes to improving on last year’s performance – especially regarding their indirect lending programs. In that spirit, this week’s blog builds on a popular series we started back in November, where we shared a portion of the Q&A following a recent webinar where James (Toby) Smith, vice president of lending for SECU of Md., joined us to share his credit union's success story and insight on how financial institutions can apply SECU’s story to address their own challenges.
Here’s more of what was discussed:
Q: Our financial institution doesn’t already have existing dealer relationships. How would a reputable provider help us establish those strong ties?
A: There’s a lot that goes into not only establishing those relationships, but also pinpointing the right dealers to target. That’s why finding the right provider with an extensive network of dealers is so critical. Your provider should be able to serve as a consultant to whichever degree is needed, whether it be helping you simply get a foot in the door or being there every step of the way. This includes learning when to visit the dealers, what’s needed to get them on board as well as how your institution can fit a dealer’s particular need or compete with more established lenders in a particular market. In that respect, it’s important that your provider have networks across the country instead of simply concentrating in a handful of regions. That way, expertise and strategies aren’t isolated to smaller samples of geographical areas. For example, if a new strategy appears to be trending upward on the west coast, it’s always beneficial to have a provider that can bring that suggestion to the table for clients in the Midwest or on the east coast.
Q: What percentage of SECU’s volume with CRIF Select involves new members compared to existing members? Did that increase or did you find that you were capturing more business from existing members?
A: Right now we’re running about at a ratio of about 70:30 (new members to existing members). Some months it will go down to the mid-60s, and other months it’s back up around 71 or 72. But it’s heavy on the new side, which speaks to the challenge of having a great onboarding and cross-selling program. That way you’re maximizing each opportunity. Otherwise, it sort of defeats the purpose of offering a membership capability. We recently launched a partnership that CRIF Select facilitated for us with Dealertrack. It involves a tool and a preferred dealer network where team members at our branches will be incentivized to use the tool that aggregates the dealer inventory in a particular market. We’re going to have more of a referral system developed between our branches and our indirect side of the house. The goal is to reduce or resolve conflict between our direct and indirect sides when it comes to our auto checks (or what others may call site drafts or draft checks) by entering all applications into the indirect channel. We hope this leads to an overall philosophical change in the way our branches are selling auto loans and uncovering members’ needs.
If you’re interested in the whole story of how SECU transformed its indirect lending program and eventually transitioned to sustainable, smart growth that matched its overall and long-term goals, click the button below to request a copy of our case study. If you’d like to listen to more on not only this Q&A, but also Toby’s advice to financial institutions of all sizes, click here to request a link to the recording.
Photo Credit: Infrogmation of New Orleans