bestpraccesandnextpracces% forconsumerloangrowth% · 4/5/2016 · learndoloop 12 bestprac*ce% **...

Proprietary / Confiden0al

Best Prac*ces and Next Prac*ces for Consumer Loan Growth

A Harland Clarke Webcast Series

April 5, 2016

© 2016 Harland Clarke. All marks are the property of their respective owners. All rights reserved.

Presenta0on materials and video replay will be provided within one week Have ques0ons? Use the ques0ons panel We’ll field them as we go and during the Q&A recap at the end of the call

Today’s Presenters

Photo Here

2

Stephenie Williams Senior Market Strategist, Lending Solu0ons, Harland Clarke

●  20+ years direct marke0ng experience in retail and financial services

●  CRM and ROI specialist

Steve Nikitas Senior Strategist Director, Harland Clarke

●  30 years experience, including senior execu0ve at financial ins0tu0on in New York, California and MassachuseXs

●  Loan porYolio and account holder reten0on specialist

Agenda

3

State of Lending Market Latest trends

Pain Points Acquisi/on, U/liza/on, Reten/on

Acquire and Retain Best Prac/ces to achieve growth

PorGolio Engagement U/lize and Retain

Crea*ve Approach Going to market

> > > Quick Poll

4

> > > State of Lending Market: Latest trends

80%

48% 48% 46% 44% 36% 28% 24% 20% 20%

0%

79%

38% 33% 41% 26%

38% 36% 21% 18% 17% 17%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% BANKS

76% 54% 48% 39% 39%

26% 24% 22% 22% 13% 9%

83%

52% 39% 46%

24% 29%

18% 17% 16% 12% 5% 0% 20% 40% 60% 80% 100%

2016 2015

Loan Growth is Top Priority for Financial Ins*tu*ons

6 © 2016 Harland Clarke Corp. All rights reserved. Source: What’s Going On In 2016 – Cornerstone Advisors

CREDIT UNIONS

Lending Market Trends

7 Source: Freddie Mac December2015 Economic and Housing Outlook

Refinancing Share of Origina*ons Forecast

Total Home Sales Forecast (Millions)

© 2016 Harland Clarke Corp. All rights reserved.

Refinancing is trending down

Home sales are trending up

The Market is Favorable

8 © 2016 Harland Clarke Corp. All rights reserved.

Millions

Auto Sales (in Millions)

Source: Center for Auto Research, July 2015.

$8,000

$6,000

$4,000

$2,000

$0

Loan balance

Delinquency rate

5%

4.5%

4%

3.5%

3%

Unsecured Loans (balances up, delinquencies down)

Balance per customer Delinquency rate

Source: Bankrate.com

16.1

13.2

10.4 11.6

12.8 14.5

15.6 16.5 17.2

17.5 17.7 17.8

0

2

4

6

8

10

12

14

16

18

20

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

> > > Pain Points: Acquisi/on, U/liza/on, Reten/on

10

New loan growth

goal Refi’s Payoffs

Net new loan growth goal

+ + =

Growth Isn’t Easy

11

Challenges: •  Cau0ous economy •  Stock market vola0lity •  Increased compe00on (P2P, Fintech) •  HELOC resets •  PorYolio runoff •  Mortgage purchase vs. Refi •  Auto leasing

•  2015 record year •  2016 projected to beat ‘15

Opportuni*es: •  Home sales •  Auto sales •  Personal loans Solu*on: Marke0ng and lending working together, cross func0on collabora0on vs. working in silos


Learn-‐Do Loop

12

Best Prac*ce Focus on all 3 – acquiring, engaging and retaining customers – in order to grow loan porYolio and share of wallet


Learn-‐Do Loop Con*nuous Improvement

HC account holder analysis determines the right targets and op*mal geographies

Personalized omni-‐channel

delivery maximizes results

Hi-‐value incen*ves with easy fulfillment excite prospects at act!

Metrics repor*ng allows clients to measure campaign results

Analyze results, adjust and

develop strategy for next campaign

> > > Acquire & Retain: Best Prac/ces to achieve growth

Loan Genera*on Audiences

14

The segments delivering the greatest return are limited in size

3 Non-Shopping Account Holders

4 Non-Shopping Prospects

1 Shopping Account Holders

2 Shopping Prospects

3

2

4

5

5 Non-Shopping Account Holders/ Prospects


1

Pre-‐Screen Credit Triggers

15

1

3

2

4

5

1 Shopping Account Holders Credit Triggers

2 Shopping Prospects Credit Triggers



Grow & Retain with Credit Triggers

* Source for 75% liu stat: Datamyx 16 © 2016 Harland Clarke Corp. All rights reserved.

Daily iden/fica/on of your account holders and prospects who are shopping for a loan

Up to 5% of Account Holders Are Loan Shopping

*Many variables impact campaign success. The informa0on on earnings or percentage increases that is contained within this case study is provided for demonstra0ve purposes only. Harland Clarke does not guarantee or warrant earnings or a par0cular level of success with a campaign.

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Credit inquiries made in the last 30 days

Product Type Count Percent of File

Mortgage 3,802 52%

Auto 816 11%

Credit Card 1,806 25%

Installment 897 12%

Total 7,320 100%

Es0mated number of new loan applica0ons generated based on historical campaign response rate of 7.8% data is 571 new loans*

3-‐5% of account holders are shopping each month


Credit Score Count Percent of File

<620 1,528 21%

620-‐639 486 7%

640-‐719 2,604 36%

720+ 2,702 37%

Total 7,320 100%

Be Proac*ve With Pre-‐Screen Campaigns

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1

3

2

4

5

3 Non-Shopping Account Holders Pre-Screen Campaigns

Perpetual Pre-Screening

4 Non-Shopping Prospects Loan Campaigns




$ $ $ $

$ High rate loans

% High payment

loans

$

Calculate po

ten*

al

savings

Preselected Refinance

offer

Loan-‐to-‐value

Home value

Savings

Originate Remaining balance

Loan Acquisi*on – Quarterly Prescreen Campaigns

Loan Acquisi*on – Quarterly Pre-‐Screen Campaigns

20

Non-‐Shopping Account Holders and Prospects

• Meet your underwri0ng criteria • High propensity to respond • Scored on demographics, credit behavior and usage


Paradigm Shij: Tradi*onal Approach


• Resource constraints

• Work effort inefficiency

• Limited product promo0on

Paradigm Shij: Next Approach

22

●  More efficient use of marke0ng resources ●  Only have to develop criteria for loan products

●  Capture loans that don’t get marke0ng support


Greater ROMI Creates loyalty w/ the financial ins*tu*on Beler consumer experience

o Offer available when they need o No guessing on approval

“Next Prac*ce”: Perpetual Pre-‐screens

23

Financial Ins0tu0on account

holder base

Quarterly credit

prescreen

Check individual prescreens against product lending criteria

Compile personalized mul0-‐product

offers

Communicate at all touchpoints

Convert preselected leads to

funded loans

Campaign analysis

© 2016 Harland Clarke Corp. All rights reserved. © 2016 CUneXus Solu0ons Inc. All rights reserved.

Invita*on to Apply

24

1

3

2

4

5

5 Non-Shopping Account Holders/ Prospects Invitation to Apply



> > > Quick Poll

25

> > > U*lize & Retain: PorDolio engagement

PorGolio Engagement


Segmenta*on •  Iden0fy •  Target •  Incen0vize

Solicita*on •  Create, implement campaigns

Op*mal Targe*ng •  Develop sta0s0cal modes •  Match offers •  Op0mize 0ming

Grading •  Sub-‐classify

Credit Risk, Marke0ng, Finance

28

Best Prac*ce – Engagement Ac*vi*es


Onboarding

Ac*va*on/ U*liza*on

End of Term Reten*on

> > > Crea*ve Approach: Going to market

Firm Offer of Credit

An offer that must be honored… IF

●  Consumer s0ll meets criteria used in selec0on process

●  Consumer meets other credit criteria established prior to offer

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Collateral Required

Credit Data Derived List Firm Offer

Eligibility Requirements Not Met

Collateral Provided

No Offer


No Offer

Collateral Provided

Collateral Not Provided

Required Not Required

Met

VALID OFFER

VALID OFFER

Remember Your Alphabet

31

OFF ER R EQU I R EMENTS

Opt-‐Out No*ce Consumer has to be given a reasonable means to discon0nue adver0sements of this sort.

Product Product which the consumer is being presented.

Qualifica*on A statement of “pre-‐qualified”, “pre-‐approved,” “pre-‐selected”.

Rate The rate the consumer can pay. When the term “as low as” is used, a maximum must also be provided.

Sum of Money The minimum loan amount. A range is fine, so long as there is a minimum.

Terms and Condi*ons

1.  Terms: The length of 0me that the offer is valid; typically greater than two days.

2.  Condi0ons: The eligibility condi0ons that must be met for the offer to be valid. If collateral is required, it must be men0oned.


Content is intended to convey general informa0on only and not to provide legal advice or opinions.

Pusng it All Together

32

Statement of Qualifica*on

Long-‐Form Opt-‐Out

Terms and Condi*ons

Minimum Amount

Maximum Rate

Short-‐Form Opt-‐Out


Personalized Omni-‐Channel

33

Email

Direct Mail

Call Center

Mobile


Online

Strong Crea*ve Elevates Success!

Three key elements for effec0ve direct marke0ng of lending products

34

Audience Data/Targe*ng

1

Offer 2

Crea*ve 3


Alloca*ng Crea*ve Real Estate:

1.  Clearly branded 2.   Compe**ve rate offer 3.  Preapproved 4.   Full offer 5.  Deal sweetener 6.  Thought starters 7.  Urgency 8.  Call to ac0on 9.  Response channels 10.  Short no0ce terms and condi0ons 11.  Long no0ce terms and condi0ons (back of leXer)


Learn-‐Do Loop


Best Prac*ce Focus on all 3 – acquiring, engaging and retaining customers – in order to grow loan porYolio and share of wallet Learn-‐Do Loop

Con*nuous Improvement

HC account holder analysis determines the right targets and op*mal geographies

Personalized Omni-‐Channel

Delivery Maximizes results

Hi-‐value incen*ves with easy fulfillment excite prospects at act!

Metrics repor*ng allows clients to measure campaign results

Analyze results, adjust and

develop strategy for next campaign

Q&A Wrap Up

Type your ques*on in the ques*ons panel

Stephenie Williams Senior Lending Strategist Steve Nikitas Senior Strategist

Presenta*on materials and video replay will be provided within one week. Visit harlandclarke.com/webcasts for this and previous events.

harlandclarke.com/LinkedIn

harlandclarke.com/TwiXer

www.harlandclarke.com/webcasts

37

Thank You

bestprac*cesandnextprac*ces% forconsumerloangrowth% · 4/5/2016 · learndoloop 12 bestprac*ce% **...

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bestpraccesandnextpracces% forconsumerloangrowth% · 4/5/2016 · learndoloop 12 bestprac*ce% **...