The intersection of customer service and technology is top of mind for Navy Federal Credit Union this year, with enhancements to electronic signatures, mobile applications, and digital portals, said Vice President of Consumer Lending Joseph Pendergast.
With 18,000 employees worldwide and more than 8 million members within all branches of the armed forces — including the Department of Defense, Coast Guard, civilian and contractor personnel, veterans, and their families — Navy Federal is on pace to add another million members this year.
“That bodes well for us as current and future members need consumer loan products,” Pendergast said. “Even with all of the expansion, knowing what members desire and how we can provide better and faster service will always be Navy Federal’s primary objective.”
Vienna, Va.-based Navy Federal aims for a “convenient and hassle-free” car-buying experience, Pendergast said.
“For active-duty members who are stationed internationally and those with on-the-go lifestyles, this allows them to understand what they can afford and allows them to enter the car-buying process with confidence,” he said.
Pendergast outlined the credit union’s customer service-focused growth plans, innovation-led initiatives, and partnerships. What follows is an edited version of Pendergast’s conversation with Auto Finance Excellence.
Auto Finance Excellence: What are your priorities for the credit union this year, and where are you allocating your time?
Joseph Pendergast: Member service and technology are big priorities for us, but these aren’t mutually exclusive. We continue to improve the members’ digital experience via enhancements to Navy Federal online, as well as to our mobile application and electronic signature platform. These enhancements, in turn, provide more ease, convenience, and speed with loan approvals and funding — something our members have come to expect.
AFE: What are some of Navy Federal’s innovation-focused initiatives?
JP: In the past few years, we’ve really prioritized technology and innovation in the auto lending space. It’s now possible for members to complete auto loan applications and get decisions on financing via a mobile device in as little as five minutes.
We also implemented electronic signatures for all of our loan products to further improve efficiency and member service. Combined with 24/7 customer service, we’re positioned well and will remain focused on ways to enhance member experience with technology.
AFE: What is driving Navy Federal’s origination volume growth?
JP: We’re poised for another strong year of auto originations. Much of Navy Federal’s continued increase in originations comes from our membership growth and the credit union’s strong culture of member service.
While consumers grapple with high interest rates and larger monthly loan payments in today’s market environment, we’re committed to providing all members with consumer loans that are the right fit for their budget.
AFE: What market headwinds are on your radar?
JP: We’ll keep an eye on the Consumer Confidence Index, as history has shown a high index typically equates to strong auto sales. However, a rising interest rate environment, together with higher sticker prices at the dealership, will certainly cause some consumers to take pause.
As car ownership becomes more expensive, consumers will likely take one of four actions: One, they will turn to leasing, which is usually a cheaper alternative to purchasing. Two, they will extend the term of their loan, so it’s more affordable on a monthly basis — even though they will pay more interest over the life of the loan. Three, instead of buying new, consumers will buy lower-priced used vehicles. There are a lot of great deals out there in the used car market, especially with the dealer certified preowned programs. Lastly, consumers may delay or put off buying a vehicle altogether, as the cost of ownership continues to increase.
AFE: What’s the status of Navy Federal’s partnership with Carfax, which allowed credit union members to obtain as many as 10 free Carfax reports a month for six months and provided the credit union with a fresh avenue to scout new members?
JP: We’re still working with Carfax, but we’re no longer in the pilot phase. Since we saw positive results from the pilot program, we strengthened our partnership in November 2018. Currently, every member approved for a used auto loan through Navy Federal receives a free Carfax Vehicle History Report, and each member who is preapproved receives two free Vehicle History Reports to serve as a shopping tool.
This interview was originally featured in the April issue of Auto Finance News, out now.