I have just reviewed the deck Steve presented at BAI, and it raises some good points. Consumer lending has become so commoditised, that market share is being left on the table by the Banks and the loan “channel” has essentially been given up to third parties and new entrants.

Nov 13-16 – BAI Retail Delivery Conference & Expo, Las Vegas

• Steve Williams, “Consumer Lending: It’s Not Just a Transaction Anymore”

Source: Cornerstone Advisors

Steve makes the point, that the very commoditisation which has occurred has created an enormous pent up demand for better advice and service in the lending arena and Banks are well placed to address that need.

• The commoditized growth of consumer debt has driven our economy for the past 5 – 10 years
• Individual consumer households and the U.S. economy at large have significantly increased their structural risk
• New competitors continue to drive down consumer loan intermediation costs
• Banks may be uniquely positioned to help consumers better manage the credit addiction in the future
• Relationship-based consumer lending may be the most promising anchor for broader retail relationships
• Only those banks that innovate product offerings and delivery methods will capture this emerging opportunity

He points out several areas where Banks could seize this opportunity:

• view loans as a relationship anchor
• bring lending capability back into the branches (this is more of a US comment)
• integrate the branch banker early with the online and call centre processes
• leverage the bankers trusted relationship, and position the Banker as a consumer advocate. Use FICO as an advocacy tool
• provide tools to staff and online
• significantly reduce the lending process (Steve says: “Terminate the practice of general financial profiling that both consumers and branch employees loathe”)

Technorati tags: lending, customer+advocacy