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Auto Loans Have Been a Boon for CU Business. Will It Continue?

Be'eri Mart

July 17, 2023

  • Banking

Each time the Fed raises interest rates, it further turns the screw on traditional banks, which must choose between raising rates and losing customers or keeping rates the same and losing money. That catch-22 has put credit unions in a tremendous position to capitalize on the opportunity.

Most banks have chosen to maintain their profits, which means their volume of auto loans has gone down. Credit unions have taken advantage and are securing more auto loans – but is it sustainable?

While interest rates have risen in the last few months, it appears we’re entering a stable period. Banks have the luxury of multiple revenue streams, and many have adjusted their strategy in regard to auto loans to focus on more lucrative revenue opportunities. In turning away loans, they’ve tightened policies for loans to protect themselves. This has created a great opening for institutions, but one they can expect will start to close as interest rates decrease and banks are able to recapture some market share.

The good news for institutions is the answer to continuing to win on auto loans is right under their nose--personalization is the key. 

To stave off banks and maintain market share, credit unions must adopt the technologies and capabilities of banks, in particular, advanced analytics.

Be'eri Mart, Earnix Head of Global Banking, shares how credit unions can leverage analytics to be first movers in regard to pricing strategies

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Be'eri Mart

Head of Global Banking, Earnix