What is keeping lenders up at night?
In researching this report, we identified six key lending worries. One worry is how to evaluate technology.
CUES member Bob Boucher, CCE, VP/lending for $303 million Westerly Community Credit Union, Westerly, Rhode Island, and a lending professional for 33 years, says he only worries about things he can’t control.
“If you ask what’s keeping me up at night, I’d say it’s the pace of technological change. The pace is accelerating every day with a new product or tool. Some fulfill a consumer need but, more and more, technology is emerging to attract consumers with the latest ‘must-have’ feature.” (Five years ago, he notes, no one thought, “Hey, I need to apply for a loan by talking to a computer named Alexa.”)
“The monster under my bed is the worry that a new technology will disrupt the industry and our business model,” Boucher adds. “Recent history is littered with vacant Blockbuster stores and malls emptied of customers and stores. In a worst-case scenario, could my credit union be next?”
CUES member Ed Michielsen, VP/business banking for $4.8 billion Prospera Credit Union, Abbotsford, British Columbia, worries about CUs staying ready and relevant.
While Canadian and U.S. economic trends align closely, they don’t perfectly track. “We should understand there are other economic trends to monitor,” he says. “These include the growing number of loan disruptors, decreasing profit margins and the increasing power of artificial intelligence.”
Tony Boutelle, president/CEO of CUES Supplier member CU Direct, Ontario, California, worries that CUs will let adverse news about the auto market dampen their efforts to do good lending.
“Auto sales were slow at the beginning of the year but showed signs of catching up in March,” explains Boutelle. “Also, factors beyond our control, such as the bad [winter] weather, as well as the government shutdown, caused anxiety and, for many in the industry, impacted car sales early in the year.” March through May is typically the strong car-buying season, and used car sales were still high as this article went to press.