“We are so excited about this,” says Michelle Hill, Marketing and Lending Director at VAMCU Federal Credit Union. So, what is this $40m Salt Lake City credit union excited about? They are now able to process loan applications with absolutely no paper involved! The branches are fully equipped with digital signature pads thus eliminating the need for any paper documents.
VAMCU uses LoansPQ, a web-based platform that allows members to submit loan applications and receive an instant approval online. The excitement for VAMCU however, stems from the back-end efficiencies resulting from a purely digital loan process. The benefits according to Hill fall into three categories: operational, marketing, and human resources.
Clearly, the operational benefits lie in the ability to archive documents electronically and automate the decisioning. Additionally, a paperless loan office is much more cost effective. “We’ll save $6,000-$7,000 in toner alone this year!” states Phil Patten, Vice President of VAMCU. The credit union has also increased loan volume 16% since implementing LoansPQ and this growth has occurred with less staff. The members of VAMCU have responded positively to the change as well. Members now initiate online 25-30% of all loans processed, thus freeing up time for loan officers to focus on other areas needing attention.
The marketing benefits result from the “wealth of information about members that is gathered,” according to Hill. For example, Patten says, “we know 30-40% of our membership is A/B credit.” Using this data the credit union can make more accurate generalizations about their membership as a whole. The wide range of information allows the credit union to target specific segments for additional products and services.
The human resources benefits lie in the ability to look at the exact loans being processed by each loan officer. When the online application is finished it is put into a queue for the loan officers to claim and decision. With the digital system Hill says she can see in-depth what her loan officers are doing. For example, if a loan officer were only picking up loans from the queue with a high credit score, their production numbers would be high. Obviously, this would unfairly skew production results for the other loan officers. The ability to see how many loans are being approved or denied, loans by credit scores, and loan status at any given time, allows management to more accurately monitor loan officer performance.
Innovations in smaller credit unions similar to the VAMCU example are becoming extremely common. Many in the industry assume technology such as that described above is only feasible for billion dollar credit unions. However, institutions such as VAMCU are beginning to change this perception by effectively using their resources to seek out ways to use technology to better their organization.
To learn more about Online Lending Capabilities register for Callahan's webinar entitled: Maximizing the Operational Efficiency of Online Loans: Best Practices in Streamlining Your Loan Processes on Wednesday, August 4 at 2:00 EST.