Our team recently returned from the Community Financial Services Association (CFSA) Annual Meeting and had a lot of great takeaways from the show. Here are our top 5:
1. CFSA CEO Dennis Shaul’s presentation kicked off the Conference with a good industry pulse as he tackled many of the hot-button issues facing our industries. He talked on how lenders have a greater responsibility to serve the customer and make the customer happy. In response to the threat of increasing regulation, he posed the question: “What is the cause that Americans do not have $1k in emergency money?” Helping my neighbor and being tolerant of one another is needed. Innovation and technology getting to a better place to serve others is needed. If we are in the race, we need to do it as a community and do it together.
2. Presentations on regulations and the CFPB prevailed throughout the Conference. Many of our peers are under investigation: 2 regional banks at CIC can’t be used because of chokepoint, and the FDIC director was quoted as saying “can’t stand payday lenders.” How will Washington affect Regulatory Outcomes? The CFSA still needs to keep building a case centered around customers’ stories and how they need the loans, keep being the voice of the customer and keep pressure on regulators.
3. Vision of the Industry – 20% of customers are not able to get credit through traditional bureaus. Finance lenders are part of the Main Street America story, not a different story, and the hometown values dialogue is what we need to share. Lenders need to be more consumer friendly, and develop consumer-centric products. Lenders must tailor to client’s needs with products and funds solutions. This can be accomplished with mobile apps while at the grocery store, and many other solutions using the technology the customers use.
4. Transforming Your Business: New Product & Customer Acquisition – Payroll Associations Products (Pay Activ, ActiveHours & Ziero) are ways employers can get money to employees before their paychecks have been fulfilled as a way to attack the tight household income issues during a specific time of the month.
Bank partnerships at 36% APR and below are another opportunity, as well as Internet/Kiosk Rent-to-Own products. These have few rate caps but need to be a true rental with return with NO penalty. Retail Installments, Business Lending and Cash Advance products are also other products lenders should consider.
5. Storefront vs Online Lending continues to evolve – Lenders are seeing 5.8X more applicants per funded loan for online. Online customers seem to have higher income than storefront, but storefront has verification and personalization. Storefronts have lower delinquency rates than online in 2016 (with a cool down in summer and holiday).
This year’s show was great for our team and for all of the great vendors and attendees we met at the show. Already looking forward to next year’s event.