5 minutes
For credit union executives, the challenge in indirect lending is no longer demand, it’s scaling properly. Growth is increasingly constrained by operational friction that limits how many loans can be funded, how efficiently teams can operate, and how competitive the credit union appears to dealers. As dealer expectations rise, institutions are differentiated less by rate and more by speed, accuracy, and predictability. When the contracting process relies on paper and manual rework, it quietly caps growth, strains staff, and weakens dealer loyalty.
eContracting addresses this constraint by modernizing the final and most error-prone stage of the lending process. By digitizing contract preparation, validation, and execution, credit unions reduce errors, accelerate funding, and support higher loan volumes without proportionally increasing cost or risk. More than an operational improvement, eContracting enables scalable growth; allowing credit unions to fund more loans per dealer, strengthen relationships, and remain relevant in a market where ease of doing business determines who wins.
Why Digital Contracting is Gaining Momentum
The shift toward eContracting is accelerating. According to Wolters Kluwer’s Auto Finance Digital Transformation Index, adoption of eContracting solutions in indirect auto lending has continued to grow steadily—up more than 37% year over year in 2024 and showing additional gains throughout 2025—signaling that lenders and dealers are embracing digital contract workflows to meet rising expectations for speed and accuracy.
Yet even as origination and decisioning processes become faster and more automated, the back-end contracting phase often remains a bottleneck. Paperwork must be printed, signed, scanned, mailed, or returned in person—steps that invite errors and create delays. For credit unions focused on efficiency and member satisfaction, this outdated process can erode competitive advantage.
eContracting modernizes this phase by digitizing contracts from end to end. Instead of handling paper documents, credit unions and dealers collaborate within an electronic workflow that prepares and validates data, enables secure e-signatures, and delivers a complete digital contract package for funding and storage.
The Impact: Faster, Smarter, More Member-centric
1. Faster funding and reduced errors
One of the biggest advantages of eContracting is speed. Digital workflows with real-time validation catch missing or inconsistent data before submission, reducing rework and delays. This means fewer contract revisions—a major source of slowdowns—and faster time-to-fund.
By minimizing manual touchpoints, credit unions also cut common errors like missing signatures or incorrect terms. Fewer mistakes translate into stronger operational performance and a smoother path from application to disbursement.
2. Enhanced dealer relationships
Dealer satisfaction is critical in indirect lending. Dealers want partners who fund deals quickly and consistently. When contracting is slow or error-prone, they look elsewhere.
eContracting makes the process predictable. Dealers can prepare compliant contracts that meet credit union requirements and submit them electronically for immediate review. This reduces back-and-forth and strengthens long-term partnerships.
3. Member experience that matches digital expectations
Borrowers expect a seamless digital experience from start to finish. When the final steps require paper documents, fax machines, or in-person signatures, the process feels disjointed and outdated.
With eContracting, members can sign electronically at the dealership or from anywhere, delivering the convenience they expect. This improves satisfaction, influences future borrowing decisions, and builds loyalty.
Executive Perspective: Is Contracting Limiting Growth?
For credit union executives, the question is not whether contracting is digital, but whether the contracting process enables or constrains growth.
While paper-based workflows often appear as operational issues, their impact is enterprise-wide. Delays, errors, and rework reduce funded loan volume, strain staff capacity, and weaken dealer relationships. Over time, these inefficiencies quietly cap growth.
Executives evaluating indirect auto lending performance should consider the following:
- Are we maximizing funded loans per dealer, or losing deals due to preventable contracting delays or errors?
- Can we increase indirect volume without adding staff or operational risk?
- Do dealers view us as a fast, predictable funding partner or a secondary option?
- Does our contracting experience match the digital experience members expect?
- Are contract errors caught upfront, or after funding when correction is costly?
- Can we clearly connect contracting performance to outcomes like look-to-book, efficiency ratio, and growth capacity?
If these questions are difficult to answer, contracting friction may be limiting scale.
Modernizing the contracting process removes that friction, supporting sustainable growth, cost discipline, and long-term relevance.
Tracking What Matters
Success takes more than just adoption. It requires ongoing measurement and continuous refinement. Credit unions looking to optimize indirect auto lending should track key performance indicators that reflect both process efficiency and experience. Metrics to consider include:
- Time-to-fund: The duration between contract completion and loan funding.
- Error rate: Frequency of return or revision due to contract inaccuracies.
- Look-to-book ratio: The percentage of approved loan applications that successfully convert to funded contracts.
- Processing efficiency: Volume of contracts managed per staff member.
- Dealer satisfaction: Feedback from dealer partners on contracting turnaround and support.
By tracking these metrics over time and establishing benchmarks, credit unions can identify bottlenecks, refine decisions, and validate a return on investment.
The Journey Toward Digital Lending Maturity
While eContracting is a major improvement for indirect auto lending, it is also part of a larger shift towards digital transformation. As credit unions adopt digital tools across origination, decisioning, underwriting, and contracting, the cumulative impact is a more agile, member-centric lending model.
This shift doesn’t happen overnight and it’s not just a technology project. It requires dealer engagement, staff training, and ongoing evaluation to support digital workflows aligned with business goals and member expectations.
eContracting is not a back-office efficiency tool. It is a growth and scalability enabler that improves look-to-book, controls operating costs, and allows credit unions to fund more loans without eroding margin or increasing risk.
Shawn Curran is senior director of product strategy management at Origence, with more than 15 years in the indirect automotive and lending industry. In this role, he leads strategy for the indirect business line, focusing on the dealer and credit union experience. His expertise spans product management, operations, and compliance. Shawn holds an MBA and a B.S. in Management Information Systems from Alfred University in New York.
