Fifth Third Bank and NextJob came together to address a challenge faced by most retail banks – Mortgage defaults.
According to the press release from the company, Steven Alonso, executive vice president and head of Fifth Third Bancorp says –
“Up to half of mortgage delinquencies are due to job loss. With NextJob, we immediately recognized an opportunity to go the extra mile to assist our customers. This is specific, one-on-one training that helps people identify their transferable skills and re-gain the financial stability of a new job.”
Mortgage defaults can eat up a banks profits very quickly, hence most banks look inwards and start putting in place stricter controls on loan disbursement to reduce the risk of default.
Instead of looking inwards, the bank went outside and decided to help such clients (who were jobless at least for 22 months) find a job, so that they could get one with their mortgage payments.
In the process, they have also turned their worst customers into their most loyal customers.
The ingenuity of the solution is that the bank can still continue to sell mortgages and at the same time worry a bit less on the risk of defaults.
A banking challenge (mortgage defaults), solved by a bank, by using a non-banking service idea, is innovative problem solving at its best..
Wishing Fifth Third Bank a resounding success with this initiative.
PS: The press release from the bank is @ https://www.53.com/mkg/press-releases/press-release-2013-02-06.html.
