This summer will mark the 10th anniversary of the debut of the app store which has grown to more than 2.2 million apps, which have come to occupy five hours of a consumer’s day. But, are lenders doing enough to capture that valuable screen time?
Billions of smartphone owners use mobile apps daily. A consumer’s average time spent on mobile apps per day has increased 69% year-over-year according to a March 2018 report from analytics firm Flurry. More importantly to lenders, mobile banking has gone mainstream, as 61% of people use mobile phones to carry out banking activity and 48% of them use a dedicated banking app, according to Mobile Ecosystem Forum’s recent Mobile Money Report.
But despite this popularity of consumer banking apps, there are a number of lenders not yet investing in the mobile infrastructure for online auto lending, even though it has proved fruitful elsewhere.
Navy Federal Credit Union, for example, jumped into the mobile space with an auto loan app in October 2016 and now sees 33% of its loan applications come from the app.
“You can get approved in minutes and sign electronically,” Joe Pendergast, vice president of consumer lending at Navy Federal, told the Center for Auto Finance Excellence. “Our customers want convenience.”
At Randolph-Brooks Credit Union, for example, automated underwriting has increased over the years and part of the credit union’s long-term strategy has been to integrate those underwriting standards into RBFCU’s current banking app.
“We are constantly looking at ways to make the lending process easier for members to get on their phone and get a loan,” Sonya McDonald, executive vice president and chief lending officer, told CAFE in a recent podcast episode. “We aren’t quite where we want to be yet, but eventually my vision is that if you go and see a car you can get on your mobile app for Randolph-Brooks … if you fill in some information, and not only could you be approved but we could also get you funded all the way through to the end.”
Even a simple prequalification app can help position a lender for more success. Capital One launched an app called Auto Navigator in 2015 that provides prequalified auto loans and at SXSW in the spring the bank announced it will soon allow consumers to scan cars on the streets in order to see estimated financing offers.
“This could include information such as their prequalified financing, their estimated monthly payment, nearby dealerships where they could buy the car, and much more,” Sanjiv Yajnik, president of financial services, and Curtis Campbell, managing vice president of product, wrote in a Medium post.
The idea of a dedicated auto lending app can also prove fruitful even after providing a loan, by bundling in payment options, according to mobile collection app developer Payix.
“Whether it’s online experiences, paying via a website or mobile application, you’re giving them additional means to pay,” Preston Cecil, chief operating officer, told CAFE. Mobile usage among younger generations and non-prime customers are especially popular he said, adding that 30-35% of that demographic prefers mobile payments over other forms. “The subprime individual mirrors the millennial behavioral … they don’t want to talk to you, they’d rather email [or text].”Like This Post