By Ray Birch
AUSTIN, Texas–Credit union members who don’t like the auto loan offer handed to them by the dealership’s F&I department can now tap a button on their phone to get another deal.
Sync 1 Systems has introduced a new solution that allows members to open up an auto loan request via a mobile device, enter some details about the loan, and then receive funding for the loan from the credit union rather than from the dealer—all in a few minutes.
Called 1-Lending Mobile, the solution is designed to not only bring more loans to credit unions, it allows cooperatives to compete against upstart fintech lenders working their way into more areas of financial lending, says Sync 1 CEO Steve Maloney.
“If members prefer to get another offer rather than the one get from the dealer, they can use our app and get an answer back from the credit union in minutes,” said Maloney. “It gives members more buying power.”
It also adds extra dollars to CU loan portfolios—loans credit unions may never have had a chance at landing—contends Maloney.
“This complements what the dealer offers and gives a credit union the chance to get more direct loans with members,” said Maloney. “I walk into the dealership, they make me an offer, and then I excuse myself for a minute and check out what my credit union can give me. If it’s better, I take it.”
Maloney also said the solution can be used just like a preapproval letter from the credit union.
“Members can use the app to find out what they qualify for and know just how much car they can afford,” said Maloney.
‘Still in Infancy’
Philip Canizaro, VP of marketing and sales, said several CUs are now up on the platform since 1-Lending Mobile was introduced in the second half of 2019. He said the credit unions that are faring best with the product are those letting members know how they can use the product, either when sitting down with the dealer or before they go into the showroom.
Steve Maloney
“1-Lending Mobile is still in its infancy stage,” said Canizaro. “Credit unions can promote this on their main website, on their auto buying website, on their mobile app and through push notifications.”
Canizaro contends credit unions cannot wait to add ways to speed up auto lending decisioning as more fintechs are entering the auto lending space, also noting that online and mobile car buying services are growing, such as Carvana and Fair.
“Promoting an easy and fast auto loan application helps credit unions compete with the fintechs of the world,” Canizaro said.
Take It Easy
Ease of use is key, said Canizaro, who explained that 1-Lending Mobile does not require much information to be entered by members to get a quick decision back from the credit union.
“They key is reducing the data entry to cut down or eliminate abandonment. Most borrowers have a short attention span now, and do everything on their mobile phones. The application is very intuitive, we don't ask for a lot of different information that may not be relevant to the deal at the time of application. So the only information we're gathering is what we specifically need to make the pre-approval. We ask for limited data just to get the application within the system, and then it connects to our 1-Lending platform, which is what the credit union’s underwriters and branch personnel utilize.”
Data Gathered is Limited
Auto-decisioning is at the foundation of the solution, which provides the credit union with enough time before funds are released to execute its normal “checks and balances” to determine if the loan is not sound, contended Canizaro.
Canizaro emphasized that collecting a limited amount of data for mobile lending solutions will be key to an application’s success in the future. He said many financial institution lenders ask borrowers to enter too much data and they abandon the tool. He pointed out fintechs are not taking that approach.
“We collect enough data to pull the credit file. We capture the income information, and addresses, so you can see the overall debt-to-income picture…,” said Canizaro.
There is no charge for the solution to 1-Lending customers, as it is an add-on to the platform.