Randolph-Brooks Talks Tech and Why It Won’t Be Using Subscription Services Anytime Soon

A credit union that has built its auto lending brand on building relationships has turned its focus to digital channels. To that end, Live Oak, Texas-based Randolph-Brooks Federal Credit Union has an extensive auto loan portfolio and is looking to improve member experience.

This process starts with mobile capabilities, said Sonya McDonald, RBFCU executive vice president and chief lending officer.

“My dream is to have somebody be able to apply on their phone, find out that they were approved, and take the process all the way through to funding,” McDonald said. She believes that such a process is two or three years away for the credit union.

Meanwhile, the financial institution has been focusing on speeding up its application process and on implementing instant loan decisioning. The underlying technology behind decisioning models uses data analytics that the credit union hopes to adopt for multiple use-cases.

“We are in the infancy of being able to identify trends based on the data that we have, but that’s going to be huge heading into the future,” McDonald said.

Part of the focus has been to utilize alternative data to paint a more holistic picture of a member’s credit health, which the CU can use as a basis to underwrite auto loans. One of the problems with relying on FICO score alone is that it’s unclear which direction the consumer’s credit is headed.

“Let’s say you have a member with a 700 credit score on the day you pull their credit, but what you don’t know is that last month that they had an 800 credit score, which means next month they could be headed towards a 600, or is it the other way around?” she said. “There are products out there that can provide us with that type of data to make better decisions.”

In addition to better decisioning models, McDonald has her eye on auto subscription models. Subscription products allow drivers to forego taking out a loan and drive various car models throughout the year for a fixed price. Although the model is a seemingly poor fit for the demographic RBFCU serves, McDonald thinks these services could increase in popularity.

“There are compelling subscription services,” she said. “From what I’ve seen, they tend to be for more elite consumers. I think that once those are accepted and tested out, we’ll see them for average consumers.”