Instant credit prescreen: a way to stand out from competitors?

In the current credit environment, offering consumers the right credit product at the most appropriate time and place will be critical to ensure portfolio growth, says Eric Lindeen, marketing director at Zoot Enterprises, a provider of instant credit decisioning and loan origination products.

Credit instant prescreen is emerging as a high return-on-investment option for financial institutions, he adds. Prescreening consumers at the teller line, online or at the ATM, among other emerging channels including mobile--as opposed to traditional batch, direct mail prescreen offers--provides an opportunity to cross-sell credit products that fit the flavor of today's credit market and the behavior of today's consumer, he notes.

Instant prescreen is an FCRA-compliant approach for offering credit to consumers in real time without prior permission. It allows institutions to qualify consumers for various credit products and replace direct mail campaigns with highly targeted and meaningful offers.

This approach enables financial institutions to cross-sell customers for products in an efficient and effective manner. For example, customers who come into a branch location to open savings or demand deposit accounts (DDA) have a high propensity to accept an instantly prescreened credit product that is offered to them in real time, says Lindeen. Because of their relevancy and comparatively simple nature, credit cards and overdraft protection are especially effective prescreen offers in this situation. If the customer accepts, the terms and conditions of the offer are instantly authorized and approved, and the new account is booked to the appropriate system of record. If the customer declines or doesn't respond, the offer is added to a database that keeps track of all existing offers for that customer.

An example of a bank that has successfully utilized instant prescreen credit is First Interstate Bank, Billings, Mont. What began as a single bank operation in 1968 has now grown into a more than $5 billion-asset institution with nearly 55 banking centers across two states.

When customers in the 1980s began requesting consumer, small-business and corporate credit cards, the bank obliged. However, the approval process was manual and complex, often taking days to issue a decision. Employees used a paper scorecard to determine if customers were eligible to receive credit...