In addition to interest rates and terms, many consumers value the speed with which money becomes available after they apply for a credit product.
Reducing the time between application submission, approval and availability of funds when accessing credit products contributes to attracting new customers and retaining account holders. This is one of the conclusions drawn from “Credit Union Innovation: How Credit Product Rates Impact FI Selection,” a PYMNTS Intelligence research study conducted in collaboration with PSCU.
Nearly 6 in 10 credit unions (CUs) interviewed for the study said product setup times are highly influential in consumers’ decisions to apply for credit products. Additional data supported this idea when showing that the quick availability of funds is an important factor for more than one-quarter of all account holders.
As extracted from the study, CUs have reduced the setup times for many of the products they offer, with almost half saying they made progress on that front to better meet customers’ demands. However, data showed that there is still much room for improvement. Of all reviewed credit products, only credit cards were available instantly or on the same day in more than 60% of cases; the rest lagged behind. For instance, funds from auto loans were available within a day in 35% of cases, according to CU responses, lines of credit in 15%, and student loans in 5%.
The influence of interest rates and terms on the decision-making process when applying for credit products was evident. However, the speed with which funds are available emerged as a secondary decision factor for consumers. Financial institutions (FIs) can capitalize on this preference by improving the application and approval process of their credit products. Offering a competitive availability of funds can help them not only attract new customers, but also retain those seeking better deals in the financial market.
“Credit Union Innovation: How Credit Product Rates Impact FI Selection” examines consumer criteria for choosing credit products, which could determine their choice of FI. The findings are based on responses from more than 100 consumers, 100 credit union executives and 54 FinTech executives who provide services to most FIs.
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