The Big Opportunity to Reduce Friction Across the Credit Union—an Interview With Bill Handel

Sponsored by Fiserv

Want to compete better with fintechs? Reduce friction. Want to make more loans? Reduce friction? Want to become more appealing to young people? Reduce friction.

The opportunity that lies in reducing friction across the credit union is a key theme in this episode of the CUES Podcast. Our guest is Bill Handel, general manager and chief economist at Raddon, a Fiserv company. Fiserv, based in Brookfield, Wisconsin, is a CUES supplier member and the sponsor of the show. 

“How do we build that relevancy within those younger generations?” he asks. “It's not just mortgages. It's everything.

“We have this historical mantra of 'Do business on my time, in my place and with my processes,'” he explains. “The older generation says, ‘Okay, the bank hours are here, and the bank locations are here, or credit union locations are here, and (I) have to go through these steps to get this process done. (The) younger generation says ‘no,’ and they want to do it differently. … And that's the thing that the credit unions need to spend more time on is how do we reduce friction?”

In the show, Handel lends his expertise in analytics and the economy to identify some specific areas in which credit unions might benefit most from reducing friction. The first is the purchase mortgage market. Another is home equity lines of credit, including hybrid HELOCs, which give consumers more choices about how they borrow.

Buy now, pay later is a great illustration of this notion of reducing friction, Handel adds. “… Merchants are willing to fund to BNPL because it makes people more likely to buy today as opposed to tomorrow, right? In some ways, it's very akin to indirect lending in the sense that if you create that incentive and put that incentive in front of the consumer, then they might buy it today as opposed to walking out and then maybe coming back tomorrow to buy. That's what indirect lending does. 

“I would argue that the hybrid lending, the hybrid HELOC, can potentially serve that same process here on the consumer lending side because what it does is it helps you to eliminate friction,” he explains. “The idea is that if you've got a home equity line of credit, which is essentially your way to buy everything, and then you can carve off pieces of that and treat them like that fixed-rate loan.

“This is not a new product, but it really has never taken off in significant ways,” he adds. “We do think that there's more opportunity in that space.”

The show also gets into the impact of the pandemic and the long tail of COVID, including:

How Main Street has sufferedGrowth in the nonresidential real estate marketThe impact of hybrid workThe Great RetirementMobile deposit acceptanceBranch network optimization

Links:

TranscriptFiservCUES Supplier membershipHow Future-Ready Technology Helps Credit Unions Pivot in a Changing MarketManaging the Risk of Real-Time Fraud in Real-Time PaymentsThe Strategic Cryptocurrency Opportunity