Utah Credit Union Aims to Take the Pain out of Lending Through an App

Add a mobile banking app to the list of places where consumers can search for cars and apply for auto loans.

America First Credit Union in Ogden, Utah, updated its mobile app in mid-June to give members help with buying a new or used car before and while visiting auto dealerships. The updated app can be used by members to find vehicles — photos included — and which nearby dealerships carry the cars. The app can also be used while consumers shop at car dealerships to scan used cars' vehicle identification numbers so that the consumer can compare dealer pricing with guidebook values. They can also quickly apply for financing from America First via the app.

With this new feature — the app is built on Fiserv's Mobiliti enterprise platform — the credit union is seeking to make its mobile banking app more useful to customers and, it hopes, generate more loan business. It's figuring out how to conform the laborious and form-heavy loan application process into something that can happen quickly and easily on a mobile device.

The $6.1 billion-asset credit union is the first financial institution in the U.S. to make available Fiserv's lending application feature, which integrates with dealerships using the auto lending network Credit Union Direct Lending (CUDL). With the recent upgrade, the app also now lets people apply for other types of credit, like recreational vehicle loans and Visa credit cards, in addition to finding nearby deals from retailers — features displayed prominently within the app.

"Our perspective is to provide the most functionally rich mobile app we can put out there," says Brice Mindrum, mobile service manager at the America First, which has 106 branches.

The upgrade comes as financial institutions nationwide are hungry to expand their lending and to find ways to make money through the mobile channel.

Some like Bank of the West have turned on messaging that lets customers tap an ad to speak with an auto specialist. USAA's Auto Circle app helps members buy a car and compares auto loan financing to dealer financing options. It offer e-signatures to verify the intent of the borrower online. But most banking apps are not equipped to let customers apply for and take out loans.

"The mobile app should be used to sell other bank products," says Jacob Jegher, a senior analyst with Celent.

America First's new feature would let shoppers log in to find a loan they want to apply for, fill out a loan application, and receive a confirmation number if they are pre-approved for a loan, with the option of connecting with a loan officer via a phone call.

The grander vision by banks and their vendors is to use data they have on customers to only pitch those who will qualify for their loans, says Jegher.

Of course, consumers have lots of choices when searching for cars, so one of the challenges the credit union faces is convincing its customers to car shop through its mobile app.

Then there's the question of whether consumers would scan VINs on cars that could have glare from the sun and lots laced with shoppers and sales people. If a VIN is not captured properly, then shoppers will not get accurate information on the car's history.

"When you're on a dealer lot, there's a lot going on," says Kenny Goldstein, director of mobile products at the car information site Edmunds.com.

Still, while there may be some snags along the way, America First's Mindrum says it was important for the credit union to enhance its app because consumers want to be able to do as much on their phones as they can on their desktops.

Mindrum observed months ago that customers were becoming frustrated by how "painstaking" it was to apply for loans on mobile devices, so to improve the experience, America First worked with Fiserv to streamline the process. For example, its redesigned app lets consumers apply for loans without having to type in information the credit union already has on file.

"We don't want the member to enter in the Social Security number or address: we know it," he says.

If members aren't approved automatically, a loan officer will still call them up — perhaps to collect more information or suggest putting a family member on the loan. "Our goal is to dial them quickly," says Mindrum. "Mobile is a fast channel. People are expecting fast. We can't provide this and not be fast."

Consumers should feel happy, and not uncomfortable, with their banks keeping their personal information stored if it means faster service and perhaps even more favorable rates.

Other financial institutions are expected to enhance their mobile apps as their vendors build out the technology. Digital Insight, CUneXus Solutions and Pitney Bowes all have technology in place that is designed to be used by banks to pitch people on loans as they shop at car dealers or other retailers.

"There's a tremendous opportunity in mobile. I think everyone knows that," says Dave Buerger, president of CUneXus. "It might sound farfetched at this point but it won't be farfetched for long. …Large purchases will become a self-service type of transaction in the future."