Generating Loans With Behavior Triggers

While loan business overall is down, the ability to quickly respond to a customer's behavior when they are shopping for a loan can be the difference between expanding a current relationship or potentially losing a customer. 

By leveraging relatively easily accessible credit bureau insight, you can deliver highly relevant communications through multiple channels to generate a steady stream of qualified and ready-to-borrow households.

As the name implies, a loan behavioral trigger lead is created when a customer or prospect is applying for a new loan or is about to refinance an existing loan. Used extensively by the mortgage industry recently due to the large number of households seeking to refinance, triggers also point to households looking for an equity line of credit, new car or even a credit card. 

These loan shopper lists are available on a daily, weekly (1-7 days old) or monthly basis (1-30 days old) and are very time sensitive since the candidate is actively seeking a loan or line of credit. As can be expected, using daily triggers is the most expensive due to both the cost of the list and the cost of daily processing/production, but these lists also produce the best results.

The lists can be customized, allowing a financial institution to select candidates based on filters such as credit score, amount of revolving debt, seasoning, LTV, monthly payment amounts, number of recent inquiries on file or any other criteria desired. Phone numbers can also be appended to the lists for an additional charge. History shows that those households with multiple recent inquiries are better prospects since they are considered 'active shoppers'.

Disconnect Seen Between Small Business Needs and Availability of Credit

While there are signs of the beginning of an economic recovery, many small and mid-sized companies are still finding it difficult to meet banks' tightened credit standards. This trend is reinforced by both a recent Greenwich Market Pulse Study as well as recent findings by Barlow Research which found that even though banks have a need to generate more loan relationships, more than 50 percent of small businesses say it is harder to secure credit this year than last. This would be in line with an American Banker study earlier this year that found that close to three-quarters of the U.S. banks had 'significantly tightened' their credit standards.

Large Banks Not Adequately Serving Small Businesses

While there is little denying the revenue potential of serving the financial needs of small businesses, there continues to be a significant disconnect between small business needs and the way large banks serve this segment according to a research report released today by Aite Group (Small Business Opportunities: Are Large Banks Missing the Boat?). And with the continuing financial crisis, availability of sophisticated cash management products to smaller banks and the significant negative press around large banks, this gap in expectations is widening. In fact, the percentage of large bank small business customers describing themselves as 'extremely satisfied' with their primary institution has dropped from 50% in 2007 to 33% in 2009. This has led to a shift of small businesses considering a community bank to be their primary financial institution from 24% in April 2006 to 35% in April 2009.

Targeting New Movers for Enhanced Growth

According to the U.S. Census Bureau, the national mover rate declined from 13.2% in 2007 to 11.9% in 2008 - the lowest rate of moves on record. Still, over 30 million people changed residences during this one year period, representing a powerful opportunity for new customer growth. In fact, even though the demographics of movers has skewed younger, with a higher percentage of renters moving, this segment continues to outperform all other prospect universes from a new customer acquisition perspective.

While many of my clients continue to focus on checking offers for the new mover segment, more banks are realizing the benefits of promoting products such as money market accounts and even equity credit and investment services.