best prac*ces and next prac*ces for consumer loan growth...best prac*ces and next prac*ces for...

Proprietary/Confiden0al

BestPrac*cesandNextPrac*cesforConsumerLoanGrowth

AHarlandClarkeWebcastSeries

July21,2016

© 2016 Harland Clarke. All marks are the property of their respective owners. All rights reserved.

Presenta0onmaterialsandvideoreplaywillbeprovidedwithinoneweekHaveques0ons?Usetheques0onspanelWe’llfieldthemaswegoandduringtheQ&Arecapattheendofthecall

Today’sPresenters

Photo Here

2

StephenieWilliamsSeniorMarketStrategist,LendingSolu0ons,HarlandClarke

●  20+yearsdirectmarke0ngexperienceinretailandfinancialservices

●  CRMandROIspecialist

SteveNikitasSeniorStrategistDirector,HarlandClarke

●  30yearsexperience,includingseniorexecu0veatfinancialins0tu0oninNewYork,CaliforniaandMassachuseXs

●  LoanporYolioandaccountholderreten0onspecialist

Agenda

3

StateofLendingMarketLatesttrends

PainPointsAcquisi/on,U/liza/on,Reten/on

AcquireandRetainBestPrac/cestoachievegrowth

PorGolioEngagementU/lizeandRetain

Crea*veApproachGoingtomarket

> > > StateofLendingMarket:Latesttrends

80%

48% 48% 46% 44% 36%28% 24% 20% 20%

0%

79%

38% 33% 41%26%

38% 36%21% 18% 17% 17%

0%10%20%30%40%50%60%70%80%90% BANKS

76%54% 48% 39% 39%

26% 24% 22% 22%13% 9%

83%

52%39% 46%

24%29%

18% 17% 16% 12% 5%0%20%40%60%80%100%

2016 2015

LoanGrowthisTopPriorityforFinancialIns*tu*ons

5 ©2016HarlandClarkeCorp.Allrightsreserved.Source:What’sGoingOnIn2016–CornerstoneAdvisors

CREDITUNIONS

LendingMarketTrends

6 Source:FreddieMacDecember2015EconomicandHousingOutlook

RefinancingShareofOrigina*onsForecast

TotalHomeSalesForecast(Millions)

©2016HarlandClarkeCorp.Allrightsreserved.

Refinancingistrendingdown*

Homesalesaretrendingup

*whiletheoverallrefimarketistrendingdown,recentlyrefiac0vityhasstartedtoheatupagain.

TheMarketisFavorable

7 ©2016HarlandClarkeCorp.Allrightsreserved.

Millions

AutoSales(inMillions)

Source:CenterforAutoResearch,July2015.

$8,000

$6,000

$4,000

$2,000

$0

Loanbalance

Delinquencyrate

5%

4.5%

4%

3.5%

3%

UnsecuredLoans(balancesup,delinquenciesdown)

BalancepercustomerDelinquencyrate

Source:Bankrate.com

16.1

13.2

10.411.6

12.814.5

15.616.5 17.2

17.5 17.7 17.8

0

2

4

6

8

10

12

14

16

18

20

200720082009201020112012201320142015201620172018

> > > PainPoints:Acquisi/on,U/liza/on,Reten/on

9

Newloangrowth

goalRefis Payoffs

Netnewloangrowthgoal

+ + =

GrowthIsn’tEasy

10

Challenges:•  Cau0ouseconomy•  Stockmarketvola0lity•  Increasedcompe00on(P2P,Fintech)•  HELOCresets•  PorYoliorunoff•  Mortgagepurchasevs.Refi•  Autoleasing

•  2015recordyear•  2016projectedtobeat‘15

Opportuni*es:•  Homesales•  Autosales•  PersonalloansSolu*on:Marke0ngandlendingworkingtogether,crossfunc0oncollabora0onvs.workinginsilos

©2016HarlandClarkeCorp.Allrightsreserved.

StrategicPlanningProcess

11 ©2016HarlandClarkeCorp.Allrightsreserved.

Discover

Define

Design

Deploy

Understandingyourcustomer’scharacteris0cs,needsandbehaviors

Developclearobjec0ves,devisesuccessmetricsandevaluatefeasibility

Createprogramstrategies,includingaudienceselec0on,offer,crea0vemessageandtes0ngmethodologies

Execu0ngtheprogramformaximumresults

> > > Acquire&Retain:BestPrac/cestoachievegrowth

LoanGenera*onAudiences

13

The segments delivering the greatest return are limited in size

3 Non-Shopping Account Holders

4 Non-Shopping Prospects

1 Shopping Account Holders

2 Shopping Prospects

3

2

4

5

5 Non-Shopping Account Holders/ Prospects

©2016HarlandClarkeCorp.Allrightsreserved.

1

Pre-ScreenCreditTriggers

14

1

3

2

4

5

1 Shopping Account Holders Credit Triggers

2 Shopping Prospects Credit Triggers

©2016HarlandClarkeCorp.Allrightsreserved.

The segments delivering the greatest return are limited in size

Grow&RetainwithCreditTriggers

*Sourcefor75%lirstat:Datamyx15 ©2016HarlandClarkeCorp.Allrightsreserved.

Dailyiden/fica/onofyouraccountholdersandprospectswhoareshoppingforaloan

Upto5%ofAccountHoldersAreLoanShopping

*Manyvariablesimpactcampaignsuccess.Theinforma0ononearningsorpercentageincreasesthatiscontainedwithinthiscasestudyisprovidedfordemonstra0vepurposesonly.HarlandClarkedoesnotguaranteeorwarrantearningsorapar0cularlevelofsuccesswithacampaign.

16

Creditinquiriesmadeinthelast30days

ProductType Count PercentofFile

Mortgage 3,802 52%

Auto 816 11%

CreditCard 1,806 25%

Installment 897 12%

Total 7,320 100%

Es0matednumberofnewloanapplica0onsgeneratedbasedonhistoricalcampaignresponserateof7.8%datais571newloans*

3-5%ofaccountholdersareshoppingeachmonth

©2016HarlandClarkeCorp.Allrightsreserved.

CreditScore Count PercentofFile

<620 1,528 21%

620-639 486 7%

640-719 2,604 36%

720+ 2,702 37%

Total 7,320 100%

BeProac*veWithPre-ScreenCampaigns

17

1

3

2

4

5

3 Non-Shopping Account Holders Pre-Screen Campaigns

Perpetual Pre-Screening

4 Non-Shopping Prospects Loan Campaigns

©2016HarlandClarkeCorp.Allrightsreserved.

The segments delivering the greatest return are limited in size

18 ©2016HarlandClarkeCorp.Allrightsreserved.

$$$$

$Highrateloans

%Highpayment

loans

$

Calculatepo

ten*

al

savings

PreselectedRefinance

offer

Loan-to-value

Homevalue

Savings

OriginateRemainingbalance

LoanAcquisi*on–QuarterlyPre-screenCampaigns

LoanAcquisi*on–QuarterlyPre-ScreenCampaigns

19

Non-ShoppingAccountHoldersandProspects

•Meetyourunderwri0ngcriteria•Highpropensitytorespond•Scoredondemographics,creditbehaviorandusage

©2016HarlandClarkeCorp.Allrightsreserved.

ParadigmShii:Tradi*onalApproach

20 ©2016HarlandClarkeCorp.Allrightsreserved.

•Resourceconstraints

•Workeffortinefficiency

•Limitedproductpromo0on

ParadigmShii:NextApproach

21

●  Moreefficientuseofmarke0ngresources●  Onlyhavetodevelopcriteriaforloanproducts

●  Captureloansthatdon’tgetmarke0ngsupport

©2016HarlandClarkeCorp.Allrightsreserved.

GreaterROMICreatesloyaltyw/thefinancialins*tu*onBekerconsumerexperience

o Offeravailablewhentheyneedo Noguessingonapproval

“NextPrac*ce”:PerpetualPre-screens

22

FinancialIns0tu0onaccount

holderbase

Quarterlycredit

prescreen

Checkindividualprescreensagainstproductlendingcriteria

Compilepersonalizedmul0-product

offers

Communicateatalltouchpoints

Convertpreselectedleadsto

fundedloans

Campaignanalysis

©2016HarlandClarkeCorp.Allrightsreserved.©2016CUneXusSolu0onsInc.Allrightsreserved.

Invita*ontoApply

23

1

3

2

4

5

5 Non-Shopping Account Holders/ Prospects Invitation to Apply

©2016HarlandClarkeCorp.Allrightsreserved.

The segments delivering the greatest return are limited in size

> > > U*lize&Retain:PorDolioengagement

PorGolioEngagement

25 ©2016HarlandClarkeCorp.Allrightsreserved.

Segmenta*on•  Iden0fy•  Target•  Incen0vize

Solicita*on•  Create,implementcampaigns

Op*malTarge*ng•  Developsta0s0calmodes•  Matchoffers•  Op0mize0ming

Grading•  Sub-classify

CreditRisk,Marke0ng,Finance

26

BestPrac*ce–EngagementAc*vi*es

26 ©2016HarlandClarkeCorp.Allrightsreserved.

Onboarding

Ac*va*on/U*liza*on

EndofTermReten*on

> > > Crea*veApproach:Goingtomarket

FirmOfferofCredit

Anofferthatmustbehonored…IF

●  Consumers0llmeetscriteriausedinselec0onprocess

●  Consumermeetsothercreditcriteriaestablishedpriortooffer

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CollateralRequired

CreditDataDerivedList FirmOffer

EligibilityRequirements NotMet

CollateralProvided

NoOffer

©2016HarlandClarkeCorp.Allrightsreserved.

NoOffer

CollateralProvided

CollateralNotProvided

Required NotRequired

Met

VALIDOFFER

VALIDOFFER

RememberYourAlphabet

29

OFF ER R EQU I R EMENTS

Opt-OutNo*ce Consumerhastobegivenareasonablemeanstodiscon0nueadver0sementsofthissort.

Product Productwhichtheconsumerisbeingpresented.

Qualifica*on Astatementof“pre-qualified”,“pre-approved,”“pre-selected”.

Rate Theratetheconsumercanpay.Whentheterm“aslowas”isused,amaximummustalsobeprovided.

SumofMoney Theminimumloanamount.Arangeisfine,solongasthereisaminimum.

TermsandCondi*ons

1.  Terms:Thelengthof0methattheofferisvalid;typicallygreaterthantwodays.

2.  Condi0ons:Theeligibilitycondi0onsthatmustbemetfortheoffertobevalid.Ifcollateralisrequired,itmustbemen0oned.

©2016HarlandClarkeCorp.Allrightsreserved.

Contentisintendedtoconveygeneralinforma0ononlyandnottoprovidelegaladviceoropinions.

PusngitAllTogether

30

StatementofQualifica*on

Long-FormOpt-Out

TermsandCondi*ons

MinimumAmount

MaximumRate

Short-FormOpt-Out

©2016HarlandClarkeCorp.Allrightsreserved.

PersonalizedOmni-Channel

31

Email

DirectMail

CallCenter

Mobile

©2016HarlandClarkeCorp.Allrightsreserved.

Online

StrongCrea*veElevatesSuccess!

Threekeyelementsforeffec0vedirectmarke0ngoflendingproducts

32

AudienceData/Targe*ng

1

Offer2

Crea*ve3

©2016HarlandClarkeCorp.Allrightsreserved.

Alloca*ngCrea*veRealEstate:

1.  Clearlybranded2.   Compe**verateoffer3.  Preapproved4.   Fulloffer5.  Dealsweetener6.  Thoughtstarters7.  Urgency8.  Calltoac0on9.  Responsechannels10.  Shortno0cetermsandcondi0ons11.  Longno0cetermsandcondi0ons(backofleXer)

33 ©2016HarlandClarkeCorp.Allrightsreserved.

34 ©2016HarlandClarkeCorp.Allrightsreserved.

StrategicPlanningProcess

Discover

Define

Design

Deploy

Understandingyourcustomer’scharacteris0cs,needsandbehaviors

Developclearobjec0ves,devisesuccessmetricsandevaluatefeasibility

Createprogramstrategies,includingaudienceselec0on,offer,crea0vemessageandtes0ngmethodologies

Execu0ngtheprogramformaximumresults

Q&AWrapUp

Typeyourques*onintheques*onspanel

Stephenie Williams Senior Lending Strategist Steve Nikitas Senior Strategist

Presenta*onmaterialsandvideoreplaywillbeprovidedwithinoneweek.Visitharlandclarke.com/webcastsforthisandpreviousevents.

harlandclarke.com/LinkedIn

harlandclarke.com/TwiXer

www.harlandclarke.com/webcasts

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ThankYou