All About that Data

How to Optimize for Growth in a Down Market

By James White Total Expert

Now nearly three years into a tumultuous housing market, the mortgage and finance sectors continue to experience volatility. In October, mortgage rates rose to a two-decade peak, with the 30-year rate reaching nearly 7%. With rates likely to fluctuate and frighten homebuyers for the coming months, it’s becoming even more important for credit unions to strengthen their pipelines, capitalize on every lead, and be prepared for whatever twists and turns the market may take.

The best way to have a good grasp on the unpredictable? Go back to the basics — data.

Now is the time for credit unions to lean on their tech stack to stay ahead of the competition. Taking advantage of the vast amount of member data at their fingertips can give credit unions the insights necessary to enhance member experience, promote valuable partnerships, drive lead volume, and help close deals in such a competitive market.

CREATE AN UNFORGETTABLE MEMBER EXPERIENCE

Borrowers are more likely to remain loyal when they’re working with a credit union that anticipates their financial needs. Having access to the right data, especially in a challenging or down market, helps credit unions to understand the nuances of their members’ financial situations and how the institution can be an asset to them.

A lull in the market also means credit unions are likely to have time to lean into relationship-building, especially with potential members and referral bases. Moving the discussion away from current rates will help members look beyond the current market and its restrictions and focus on their long-term financial goals. Leveraging data to understand members at an individual level gives credit unions the ability to use automation to connect on their specific financial needs.

The most successful financial institutions will transform their marketing efforts by leveraging technology that allows them to respond to individual member needs as they evolve with market changes. Engaging members in dialogue and sharing hyper-personalized content specific to their individual financial goals positions credit unions to be seen as the trusted advisor best equipped to help navigate life-changing financial decisions. Communicating and advising honestly and openly with members based on their data, will show them that they are understood and have a partner for life.

When markets get tight, credit unions should prioritize member experience and take advantage of technology that can help them do more with the data they already have. Purposefully nurturing current and potential member relationships now, when other financial institutions may be taking a step back, demonstrates to members that the credit union is there to support them, and will be when the market rebounds.

IF YOU CAN’T BE A LENDER, ADVISE

In a down market with high interest rates, it’s inevitable to see a slowdown in new borrowers. Luckily, the mortgage industry is cyclical and once it turns around, there will be a flood of members looking for lending partners. When this happens, there will be fierce competition, and credit unions that have offered financial insight and strategy beyond what is expected will come out on top. In a down market, if you can’t be a lender, stay connected to members by serving as a trusted advisor.

Members don’t want to be simply marketed to, especially when the content sounds tone-deaf to current market fluctuations. Credit unions that can advise and educate members by laying out realistic strategies that look beyond the current market conditions will have a full funnel when the market starts to look up. The more data and insights credit unions have available, the better advice and overall member experience they can provide.

Helping members understand their options to refinance, the benefits of owning a home to build equity, or the option for a reverse mortgage are specifically important. Other strategies, like the costs of waiting, rent-versusbuy options, and other loan opportunities for first-time homebuyers are all valuable insights that help build trust with members. When credit unions have access to the right data to inform and advise on these strategies, members will feel empowered and supported in making decisions when the time is right.

Surfacing member-specific insights to better understand what would be of value to them, given where they’re at in their financial journey, shows you are proactively thinking of them. There has been a mindset shift for many originators and they are starting to take an advisory role more than ever before. By harnessing the best technology and data intelligence to surface opportunities, credit unions are staying in front of members’ needs and maintaining relationships with members in new and innovative ways. Staying connected with members and making them feel educated and empowered will put credit unions in a stronger position to close more deals now, and in the future.

James White, industry principal for banks and credit unions at Total Expert, has more than 25 years of experience helping modern depositories grow market share and drive profitability. Having worked with some of the largest banks and credit unions in the world, James believes in the power of an empathetic bank or credit union to create customers for life.