Donuts & Digital Banking: How to Grow Your Loan Portfolio

By Mike Joplin

Joplin Mike

I was driving past the site of a new Dunkin Donuts the other day and thought to myself, I’m looking forward to that. Why? I’m not a big donut fan by any means. And I couldn’t tell a cup of Dunkin Donuts coffee from a cup of Starbucks from a cup of Maxwell House. The thing that attracted me to this Dunkin Donuts was the drive-thru.

That’s right. On the rare occasion that I do want a donut, I’ll gladly drive a few extra minutes for the supreme convenience of not having to get out of my car. After all, I already do that when I need to make an ATM withdrawal. The same holds true for Mexican fast food, too.

The drive-thru is just more convenient. Or to put it in today’s high-tech terms, the drive-thru makes for a more frictionless user experience. Instead of forcing me into the store, credit union or Mexican joint, the drive-thru essentially puts the service provider in my car. For at least that last hop, they come to me, so I don’t have to go all the way to them.

That got me thinking about credit unions and digital banking. Are there any lessons to be learned from the drive-thru Dunkin Donuts? I think there are.

How to Reach Members

The popular thinking is that credit unions need to provide exceptional digital services to attract millennials and other desirable demographics. I agree 100%. But how does the credit union reach those potential members in the first place? Your credit union might be like the best donut shop in town that doesn’t have a drive-thru. A good number of people will just drive past on their way to Dunkin Donuts because they want the convenience of a drive-thru.

That’s where marketplace lending comes into play. Putting your credit union on a marketplace lending site, e.g., LendingTree, is the equivalent of adding a digital drive-thru. It brings your credit union to the desirable demographics instead of forcing them to come to you.

There’s plenty of opportunity, too. According to Statista, Americans will borrow $120 billion through unsecured marketplace loans this year. Statista also predicts about 25% annual growth, putting that loan volume north of $292 billion by 2022.  

Are you Frictionless?

How much of that will end up on your credit union’s books? Unless you offer the frictionless drive-thru convenience of marketplace lending, not any.

It’s also projected that those 2022 numbers will represent about 215 million borrowers. That means tapping into marketplace lending can help grow your loan portfolio andalso bring in some very attractive members. The real challenge is establishing a presence on the national stage.

Fortunately, credit unions aren’t averse to working with each other. Individual credit unions can compete in marketplace lending if they pool their resources to pursue this business. The opportunity is there and it’s obvious. If we work together, we can generate some serious loan revenue. 

Mike Joplin is the CEO of Credit Union Lending Cooperative (, a CUSO that specializes in marketplace lending.

Section: Standard
Word Count: 640
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Copyright Year: 2019
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