Mobile applications have the potential to turn credit unions into a ubiquitous, always-open financial presence.
On one hand, this enables credit unions to capitalize on the instant gratification mindset the connected age has wrought while cutting transaction costs. On the other, it has created a slew of ancillary issues, foremost being how to secure data collected remotely and how to make mobile an appealing option for both user and staff member.
CU QUICK FACTS
Interra credit union
Data as of 03.31.16
HQ: Goshen, IN
12-MO SHARE GROWTH: 10.68%
12-MO LOAN GROWTH: 30.96%
According to a July 2015 report from KPMG, the total number of mobile users worldwide is projected to reach 1.8 billion by the end of the decade, and the availability of mobile options for this increasingly mobile population is a factor in deciding whether to change financial institutions.
At Interra Credit Union ($837.7M, Goshen, IN), mobile banking is a way to build loyalty and engagement, especially among coveted millennial and Gen X members and potential members.
Interra rolled out a mobile loan application platform in April 2015 that extends and unifies the credit union’s digital presence in a way that helped Interra increase remote loan applications by 50% in little more than a year.
David Dekker, VP, Interra Credit Union
And David Dekker, vice president of Interra’s INdirect Services, projects another 50% increase by this time next year. A key reason for this is because the credit union now offers a consistent interface for users regardless of device.
“A key driver in getting someone to come back to our institution is giving them the same look and feel every time versus having Interra look different when they access it on different devices,” Dekker says. “With today’s generation, that can be a barrier. If the technology is not what they expect, what does that say about the other products and services we provide?”
A New Standard
Implementing the new mobile loan platform created a centralized, standardized, nearly automated lending environment. It also offers controls Interra didn’t have previously.
For example, loan advisers were approving loans where the debt ratio was outside the credit union’s lending parameters or the credit score didn’t meet the threshold, says Vi Ryder, assistant vice president of lending operations. The new platform puts a block on such activity and has curtailed approval authority for loan advisers at individual branches.
Vi Ryder, AVP, Interra Credit Union
Now, instead of loan advisers rendering decisions on applications, every application goes through underwriting. If a number is outside of the credit union’s lending parameters, the system flags it.
The platform has reduced Interra’s human resource expenditures — and according to Dekker, the mobile and online app should lower branch-staffing needs — but Interra still ensures there is ample human oversight and quality control.
“We have a monthly report we review on instant decisions to make sure all the documentation adheres to what we need,” Ryder says.
The Benefits Of Adoption
Dekker characterizes the out-of-the-gate adoption rate as “slow,” but increasing over time.
“Month after month, we’ve seen adoption grow for people using those services,” he says. “We’ve seen a gradual increase over the past six months as both members and internal staff feel more comfortable [with the platform].”
Chalk it up to the gradual giving way of a legacy mentality.
“From a user standpoint, it’s way more streamlined and efficient,” Ryder says.
And for staff, Ryder says the additional control the platform offers “speaks for itself.”
“The report functionality is bar none,” she explains. “I can pull any data anytime. If I want to see how many online applications we received from 10 p.m. to midnight, I can find that out. I can see how many applications we approved but didn’t fund. If we can dream it, we can build it.”
The Cost Benefit
According to Dekker, Interra has not yet noted a drastic increase in overall savings since implementing the new mobile loan application platform, but it’s still early and members are still getting comfortable with using it.
We’re wanting to be a leader in this space and be more progressive than some of our peers might be comfortable with.
“We’re looking at longer-term benefits rather than an immediate drop-off in costs,” the vice president says.
As for what it cost to add the new platform, Dekker says Interra mitigated the risk endemic in a core conversion by “doing our due diligence and talking to other credit unions” that use the MeridianLink LPQ platform Interra has deployed, and, overall, the credit union is happy with the process and results.
Currently, Interra is using the platform primarily for car loans and credit cards. Whether it offers other services, such as loans for small businesses, depends on how aggressive it wants to get.
“It’s up the credit union how far we want to push the envelope,” Dekker says. “We don’t have any concrete plans for that now.”
That might not be the case for long.
“We’re known as an industry that’s a little slow to react to change,” the Interra vice president adds. “From our perspective, we’re wanting to be a leader in this space and be more progressive than some of our peers might be comfortable with.”