Smartphone Lending Platform Improves Application Completion Rates and Payment Protection Sales

It’s been apparent for years that Smartphones and other mobile web devices would become a critical consumer lending channel. Even so, when CUNA Mutual Group engineered the ability to track which web browser applicants were using to access™ in 2009, the sheer number of applications submitted via iPhones, iPads, Blackberries, etc., surprised John Putman, the company’s Lending Solutions Group director.

But it wasn’t the number of applications that concerned him as much as how many were being abandoned.

“Only 22 percent of these applicants were getting all the way to clicking the ‘Submit’ button,” Putman said.

Putman and his colleagues worked with credit unions on a solution, quickly identifying two objectives for a mobile web application system:

  1. The ability to detect and adapt to screen formats required by an expanding variety of mobile devices
  2. Readable, up-to-date, compliant disclosures for loans and payment protection products

A strong start

The resulting Smartphone Loan platform launched by CUNA Mutual Group on June 29, 2011, has accomplished both objectives so far, Putman says. In pilot tests at two credit unions, the completion rate for applications jumped 52 percent and 138 percent, respectively, in two months.

Through late November, more than 500 credit unions had received applications through the new mobile web service. Average daily applications processed through the system increased from 50 per day in July to more than 65 per day through late November.

Another encouraging result: In 47 percent of these applications, applicants expressed interest in one or more payment protection products, compared with 40 percent for™ applications overall. Putman says Smartphones make it easy for members to access explanations of protection products, so choosing the right products without help from a loan officer is easier.

There’s not an app for that

An important decision in creating a mobile web lending system is whether to use an “app”—a program that users download to their Smartphone or tablet and run when they want to apply for a loan.

Some loan application apps exist, Putman says, but they have serious flaws.

“The disclosures for loans and for loan protection products are changing all the time now,” he said. “Our quarterly releases [for™] often include a tweak required for compliance.”

Members shouldn’t be required to download an updated app every quarter just to make sure they’re getting compliant disclosures, Putman noted. Apps can also expose members to identity theft by storing personal and financial information from loan applications in the memory of a mobile device that can easily be lost or stolen.

CUNA Mutual Group’s system relies on mobile web servers for compliance updates and security, so no information is stored on members’ devices.

Don’t set it and forget it

Putman advises credit unions that use a mobile web loan application to make sure the application is as simple and user-friendly as possible. For example, requiring references has increased abandonment rates for some credit unions.

“Monitor your abandonment rates and adjust the application if you need to,” he said.


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