Credit union uses member experience design to increase its auto lending portfolio

Client Background

A large credit union based in the Midwest with over $1 billion in assets under management.

The Business Challenge

The credit union was concerned that they were not differentiating themselves from their competitors; and competing on price and rates. This issue was particularly apparent with the auto loan process, where their closure rate for pre-approved loans was less than 25%.

The member would end the pre-approval process with an agreement for a loan up to a certain limit. After they negotiated the final sale price of the car with the auto dealer, they would have to return to the credit union to close on the loan. The customer could not take possession of their car until they closed on the loan.

The credit union wanted to:

  • understand where their current member experience process was failing 
  • when and why members abandoned the process
  • enhance the process to drive members to close on pre-approved auto loans
  • improve closure rates

The Baker Tilly Approach

Improve understanding of the current member experience – Knowing that the credit union was seeking to form a stronger, more personal bond with its members, Baker Tilly surveyed the credit union members who had recently gone through the auto loan pre-approval process, both those  who closed on a loan and those who did not.

Baker Tilly identified the moment of truth in the loan process - when the member makes the choice of continuing with the process or abandoning it and why. Members abandoned the process because they never felt as though they had secured a loan at the end of the pre-approval and lacked a sense of emotional closure on the process. When auto dealers offered a loan through their lenders, the member secured a loan at the end of the pre-approval process and had no issue accepting the offer.

Baker Tilly conducted a workshop with the credit union’s leadership team to brainstorm potential solutions. Through a proven methodology, Baker Tilly helped them identify and test multiple potential solutions with credit union members and select which to implement.

Business Impact

Identify and develop a strategy to enhance the member experience:

  • Baker Tilly proposed a strategy to enhance the member experience. The member now ends the pre-approval process with a blank check for up to their pre-approved lending limit, allowing the member to feel that they had completed the auto loan process and committed to borrowing from the credit union.
  • The member can now drive their new car off the dealer’s lot on the day of the purchase, without delay. Any necessary follow ups with the credit union can be done after the member has taken possession of their new car.
  • Members feel more emotional closure at the end of the pre-approval process, resulting in a substantial increase in the credit union’s auto loan portfolio.
  • Baker Tilly’s involvement in this project helped accelerate an actionable successful strategy, with an emphasis on member experience.
  • The credit union’s closure rate for pre-approved loans has increased from 25% to 83%.

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