Golden 1 celebrated the opening of its first location dedicated solely to home loans in Campbell, Calif., in May.
Across nearly every sector, companies are focused on harnessing technology to improve the products and services they offer customers. One need look no further than retail giant Amazon to make the business case for focusing on customer convenience above all else.
The financial services industry is no different. Convenience and improving the member experience through digital channels is top of mind for all credit union executives, especially in an age where technology is synonymous with customer service. Amazon continues to dominate retail, thanks to the convenience it offers online. However, it has found customers prefer to do returns in person. Recent partnerships with Kohl's and Whole Foods placed Amazon lockers at multiple locations throughout select markets. The partnerships have helped Amazon bridge the brick-and-mortar gap and bring much-needed foot traffic to retail stores.
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Golden 1 Credit Union believes consumers' preference for in-person transactions is also true for some financial products and services, particularly mortgages. Recent research by Celent indicated consumer tastes are changing. For simple transactions such as deposits and transfers, consumers prefer online banking. For topics that require in-depth conversations such as investments and home loans, 77% of consumers would rather visit a branch. Purchase loans in particular require the human touch. Consumers also find solace knowing there is a local branch to help solve problems.
While online lenders are gaining market share on the big banks, particularly for refinance loans, credit unions have continued to increase their share of mortgage loans with a mix of online and personal interactions. Experts continue to debate the value of an entirely online mortgage, but one thing is certain: In a time when there is not much room to differentiate mortgage products, financial institutions must seek opportunities to provide exceptional delivery and experience to consumers.
Brick and Mortar in a Digital World
As the nation's sixth largest, and California's leading, credit union, Golden 1 is enhancing its member experience with the technology and digital assets to best serve our members. Our focus is on building a cohesive and consistent experience across the many channels – online, app, in-person and phone – members can use to access their money, get advice or obtain new products and services.
Golden 1 has analyzed the needs of our members and found that while enhancing the digital experience is essential, there is a significant opportunity to improve one of the largest financial transactions of a member's life – purchasing a home. Like returning a purchase, many consumers prefer to finance a mortgage in person. Consumers also prefer specialized support from experts who focus exclusively on home loans. On such a large loan, differences in interest rates and loan options can have a huge effect on the long-term cost of the loan. Finding the right product to meet our members' goals is essential and puts a premium on face-to-face advice to ensure they have the right loan not only for today, but for the future.
Recently, this focus on personal interaction led Golden 1 to open its first Home Loans Center in California's Santa Clara County – one of the hottest and most competitive real estate markets in the country. In May 2018, the median home price was up nearly 17% year-over-year, the average number of days on market was 14 and the number of single-family home sales increased by 19.7% compared to April 2018.
The Golden 1 Credit Union Home Loans Center is a one-stop shop for home lending. Here, Home Loan Advisors help members with the entire mortgage, refinance or home equity loan process in a comfortable atmosphere dedicated to lending. Experienced Home Loan Advisors can also connect homebuyers to realtors who specialize in the local market and offer Golden 1's Buyer Advantage program, which provides a discount on closing costs, among other benefits. We also focus on demystifying the mortgage process through our Financial Wellness program by hosting events for first-time homebuyers and real estate agents.
Many financial institutions are shuttering brick and mortar locations due to cost, but the Home Loans Center is more economical than building and operating a branch because it requires less infrastructure, space and staff to provide customized member service.
Breaking Into a New Market
While there are headwinds, including a lack of new inventory and rising home prices, recent industry data is encouraging. The real estate market is emerging from the refinance boom and there are more purchases than refinance transactions. There is also an influx of first-time homebuyers, people moving into second homes, and people recovering from previous short sales and foreclosures.
Golden 1 already has an established, successful team of home loan advisors in Santa Clara and now the Home Loans Center provides more resources to support local homebuyers. By opening a retail center in this bustling Silicon Valley community on a high-traffic street, Golden 1 hopes to introduce more people to the brand and raise awareness of the benefits of borrowing through a credit union.
We also continue to build our network in the Santa Clara market, concentrating on area realtors, insurance agents and financial advisors. This network will help spread the word to potential homebuyers and help us develop relationships with others who play key roles in the real estate market, including real estate agents and community groups focused on lowering the barriers to homeownership.
A Better Mortgage Experience
The Home Loans Center will provide Golden 1 the opportunity to do what it does best – give a more personal experience and in-depth financial advice during the mortgage application process.
Golden 1 Home Loan Advisors will partner with the homebuyer to evaluate the myriad of options available and ensure members make the right decision for their unique situations. Sometimes a computer or a voice on the telephone may not offer the information, time or resources needed to make a homebuyer feel confident when making a huge financial decision.
Our goal is to be California's credit union, and if successful, we plan to build more Home Loans Centers in other communities throughout the state. With so many of the state's loans originating in Southern California, we see that as a potential market in the future.
In a time when business is constantly evolving to meet consumer expectations, and as we continue to focus on channel convergence, Golden 1 is confident that the member experience will always be stronger when human interaction and technology are working together.
Greg Brown Greg Brown is SVP and Chief Lending Officer for Golden 1. He can be reached at 916-732-2900 or [email protected].
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