The Third Screen: Mobile Borrowing -- The Smartphone Loan
There are some things that are a better fit with certain screens.
For example, movies look better on a movie theater screen, a television series may be more pleasant on a large-screen TV, and spreadsheets are easier to work with on a PC screen.
It’s intuitive to consider that filling out lengthy applications also would be better suited for PC screens -- or even tablets, for that matter -- rather than the smaller screen (and keyboard) of mobile phones.
After all, how much data would a consumer be willing to enter through their smartphone?
It turns out that many people will enter a lot as they fill out lengthy loan applications on mobile phones, as one company found, although they had not initially anticipated it.
In 2000, CUNA Mutual Group, a financial services provider that produces retirement and investment products, launched a loan application Web site called Loanliner.com, marketed to credit unions. Credit unions throughout the U.S. then marketed the loans to their members, using the Loanliner platform. But 10 years after launching the site, CUNA Mutual was surprised to find that thousands of loan applications were coming from mobile devices.
Like many others in the world of mobile, they faced the choice of whether to create an app or a mobile site. Since CUNA Mutual is a compliance company and credit union loan applications are highly regulated, the company took the mobile Web route, launching in July 2011.
This allowed always-updated disclosures (much tougher than it sounds) to be displayed to loan applicants of the 552 credit unions that have access to what is known as Loanliner with Smartphone Loans. As the loan applicant moves through the mobile loan process, a series of screens -- each with different disclosures of information -- appear based on their previous and current input.
In addition to finding more people using the mobile method since the start, CUNA Mutual found that the mobile loans were effective. “The average loan has a 42 percent completion rate, while mobile had a 49 percent completion rate,” said John Putman, director of lending business systems at CUNA Mutual.
This means that more people applying for loans through their smartphones than desktop or laptop finished the loan process, ultimately producing more revenue for the loan originator or credit union.
Perhaps more interesting are some of the other findings from the mobile loan process:
The average age of the loan applicant from the desktop was 39 years old; smartphone, 32.
The average loan amount via PC was $17,000; smartphone, $10,000. (Putman speculates that the lower age demographic may be borrowing less since they have less income than their senior counterparts -- so may opt for a less expensive car to borrow for, as one example)
There were initially 50 loans a day via smartphones at launch in July 2011. That number is now near 100 a day.
More than 15,000 loan applications have been submitted from the Smartphone Loans version since launch.
Roughly the same number of loan applications comes from the two major mobile operating systems, with 51 percent from iOS and 49 percent from Android.
Of the loan requests coming through Apple devices, 68 percent come from iPhone, 26 percent from iPads and six percent from iPods.
Depending on the credit union, some of the information within the loan application self-populates or is automatically filled in as the loan process moves along -- all with the obvious security in place.
Next up for the mobile loan process of CUNA Mutual later this year is development of an iPhone and Android app that ties into the mobile Web.
“The mobile Web does not give access to the camera or GPS,” says Putman. He sees the potential when a credit union member drives into a car lot and spends a certain amount of time there, pushing a message saying they’re pre-approved for a loan -- information that could be readily available through the system.
The idea is to more tightly link the purchase and loan process so that at least conceptually, while a person is shopping, they can borrow on the spot during the actual buying activity.
That the masses of consumers will fill out lengthy forms or apply for loans via smartphones may not be intuitive or even on the drawing boards for some.
But if there is a way for something to be moved to mobile, so that the consumer can do it while on the go and on his or her time frame, the chances are high that the mobile consumer will move it. Smart businesses will follow them.
Chuck Martin is author of "The Third Screen; Marketing to Your Customers in a World Gone Mobile," CEO of Mobile Future Institute and Director of the Center for Media Research at MediaPost Communications.