The annual transition from winter to spring here in the Northeast brings with it a bustle of activity during the longer, warmer days. Walkers, joggers and bikers fill the roads and trails, and the sounds of children outside playing course through neighborhoods. Of course, we are also often reintroduced to the household To-Do lists that had been stowed away during the winter - Home Depot revenue-boosting rosters of spring cleaning, organizing, painting, mowing, planting, and pruning that can bury weekends, leaving you wondering where they went on Monday morning. Thinking of To-Do Lists brings to mind the myriad articles and polls conducted on credit union and bank executive priorities for the new year.
One such publication is “What's Going on 2016: Cornerstone Advisors’ Take on Community Bank and Credit Union Priorities and Technology Plans” from Cornerstone Advisors. Reading the piece offers a reference point for what projects are at the top of the 'To-Do' Lists across the industry. Below are the top three priorities identified in the report for credit union growth priorities, and efficiency and cost savings priorities.
Credit Union Growth Priorities
Efficiency and Cost Savings Priorities
What's clear as well from the report is a general recognition amongst credit union execs that the solutions for achieving these priorities lie in efficient and effective use of technology. 74% of the CU execs surveyed selected "Use technology for better efficiencies" as a technology priority and 67% selected "Use technology for better member service and/or competitive differentiation". As somebody who lives in the technology product space for financial institutions, I am obviously optimistic about this outlook. There are a number of ways in which the right solutions aligned in the right way with the financial institution’s business can help to achieve these top goals. There are two initiatives that apply to each of the growth and efficiency priorities.
Direct-to-Consumer Loan Origination
Installing new windows in the front of your home brings an enhanced curb appeal to the property, and it also makes the house more efficient - eliminating drafts and hopefully lowering energy bills. In the same way, a robust direct-to-consumer loan origination solution can enhance your financial institution and make it more efficient. The "curb appeal", or user-friendliness of a web/mobile presence, is increasingly important for financial institutions battling fierce competition for a new generation of consumers. Pushing more of the loan origination process into the hands of the consumer provides the 24x7, on-demand requirements of today's shoppers.
At the same time, there are great efficiencies that can be realized in the direct-to-consumer lending channel. Applications can come into the credit union without reliance on branch or call center staff. A guided, intuitive online loan application, with well-crafted resource verbiage and help topics can provide a very efficient portal for consumers. Configurable business logic, such as required fields, can ensure all necessary information is collected up-front from the consumer - eliminating the time and cost of continuous follow-ups or corrections. Financial institutions can bolster the application experience further by importing known data for existing members, which reduces the consumer's data input and ensures the accuracy of the data. Beyond application collection, an effective portal can also provide the means of collecting and delivering, and allowing for electronic signature of, applicable documents. This real-time communication streamlines the process while also removing paper and reducing the cost of applicant inquiries.
Automated Loan Decisions
The automation of credit decisioning for loans is functionality that sits firmly at the intersection of consumer loan growth and operational efficiency. There may be no more important tool than a robust decision engine when looking to increase volume while managing risk and expenses and delivering a premier consumer experience. An effective tool can mitigate credit risk by providing lenders the ability to factor any number of data points in its decisioning and pricing models to capitalize on the greater sophistication of credit policy opened up through the expansion of data availability and analytics. It will also provide both visibility into the automated underwriting results and easy adjustment of the rules based on analysis of the results.
The automation offers benefits on multiple fronts. The bands of loans at the top and bottom of the credit worthiness spectrum can be decisioned with minimal to no interaction with the underwriting staff. This keeps those valuable resources focused on the loans that truly need their attention while offering greater scale. The consumer experience is also enhanced significantly. Whether the consumer applies online or through an "assisted" channel, such as a branch or call center, an automated decision delivers a much quicker outcome to the applicant - increasing the chances of getting the business.
I look forward to helping our new and existing clients tackle the items on their 2016 To-Do Lists using the range of tools we have at Temenos. Right now, it's time to start up the mower and tackle the lawn…and maybe, just maybe, I'll be able to dust off the golf clubs in the garage.