How Credit Unions Can Unlock Hidden Efficiencies in Their Lending Programs

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Brit Barker, CMB, AMP Photo

3 minutes

Look to automation, artificial intelligence and digital transformation.

We all know that credit unions are facing numerous headwinds in 2023, including high-interest rates, an uncertain economy and the liquidity challenge. To navigate all this successfully, credit unions must uncover the hidden efficiencies within their lending programs. Fortunately, we have arrived at a point when technological advancements offer a remarkable opportunity to transform lending operations, streamline processes and enhance the member experience.

Automation: A Game-Changer for Credit Unions

An area credit unions should prioritize is automation, particularly in document collection. With the advent of affordable and accessible automation solutions, credit unions can automate the identification of documents and validate financing policies, providing a seamless experience for the credit union, lending staff and such lending partners as auto dealers.

By automating these processes, credit unions can ensure accurate consumer income calculations, validate applicant data, and effectively classify and organize loan documents. The result is faster and more accurate loan processing, minimizing human errors and reducing the risk of fraudulent activities. This improves operational efficiency and enhances the credit union’s ability to serve its members more effectively. It also increases satisfaction among lending staff as you free them up from repetitive tasks. 

Artificial Intelligence: Empowering Credit Unions and Members

Artificial intelligence holds immense potential to enhance efficiency for credit unions. Ironically, our mission to serve humans can be greatly amplified by machines, enabling us to assist our members with speed, consistency and more transparency. 

By leveraging AI algorithms, lenders can make faster and more accurate decisions, significantly reducing the time and effort required to process loan applications. Automated underwriting powered by AI not only improves efficiency but also expands access to financial services for traditionally underserved communities and protected classes. Credit unions can now reach a wider range of individuals and provide them with the necessary financial support. 

Even better, implementing automated processes allows credit unions to allocate resources more efficiently, freeing up time and staff to focus on building personal connections with members and providing tailored financial solutions.

Embracing Digital Transformation for Enhanced Efficiency

One of the most impactful ways for credit unions to unlock efficiencies in their lending programs is by embracing digital transformation. Online applications, electronic document signing and digital verification processes are revolutionizing the lending experience for borrowers. These streamlined processes significantly reduce turnaround times, providing borrowers with a smoother and more convenient experience.

Furthermore, digital platforms enable credit unions to centralize and automate data collection and analysis. By gathering valuable insights into member behaviors and preferences, credit unions can make data-driven lending decisions. This personalized approach ensures that credit unions meet the unique needs of their members, enhancing customer satisfaction and loyalty.

Collaboration with CUSOs and Fintech: Unlocking Efficiency Together

Now more than ever, credit unions should truly lean into their partnerships with credit union service organizations and fintech companies. These collaborations provide credit unions of all sizes with access to affordable and easy-to-implement technology solutions without requiring substantial investments.

By working together and sharing resources, the credit union industry can overcome challenges and continue serving communities effectively, regardless of the fluctuations in interest rates. The power of cooperation, coupled with shared knowledge and resources, enables credit unions to optimize their lending programs, enhance operational efficiency and provide innovative solutions that cater to the evolving needs of their members.

Final Thoughts … 

The pursuit of efficiency is vital for credit unions to remain competitive and resilient in the face of various challenges. By embracing automation, harnessing the power of AI and accelerating digital transformation, credit unions can thrive. 

The ultimate benefit of improving operational effectiveness is that it frees credit union staff to focus on deepening member relationships and serving their communities. With a commitment to innovation and a member-centric approach, credit unions can navigate the complexities of the financial landscape and emerge stronger than ever before.

Brit Barker, CMB, AMP, is SVP/enterprise solutions for Origence, a CUES Supplier member. He has 20 years of experience helping financial institutions improve their lending performance and exceed consumer needs. Recognized as an industry leader with an innate talent for balancing strategic focus with operational execution, Barker is an authority in the consumer and indirect lending industry.

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