Turn Cost Centers Into Revenue Generators

A focused sales mentality in remote services has led to unprecedented ROI for one Indiana credit union.


3Rivers Federal Credit Union ($727M, Fort Wayne, IN) serves more than 67,000 members through a footprint of 19 proprietary branches in Indiana and Ohio, a legion of shared branches and ATMs, and an increasingly sophisticated set of online and mobile offerings.

For 3Rivers, the virtual channel isn’t just a path to increased efficiency and reduced operating costs — it’s a powerhouse of lending activity, dramatically bolstering the bottom line. The creation of a two-person, sales-oriented eServices team in 2011 — housed within the umbrella of a more service-oriented Member Relations Center (MRC) — has allowed 3Rivers to mobilize electronic resources in an entirely new way.

As of 4Q 2012, the average member relationship at 3Rivers is roughly $9,000 larger than its peers. And the growing appeal of a 24-7 virtual network has allowed the credit union to connect with roughly 11% of its potential membership, compared to a peer average of just 4.2%.


  • HQ: Fort Wayne, IN
  • Assets: $727M
  • Members: 67,095
  • Data Processor: Open Solutions, Inc.
  • Home Banking: Open Solutions, Inc.
  • Bill Payment: Ipay, Llc
  • Mobile Banking: Open Solutions, Inc. DNAmobile
  • Mobile RDC: Ensenta
  • Business RDC: Jack Henry’s ProfitStars
  • Esignature: Docusign
  • Loan Origination System: MeridianLink’s Loan PQ
  • Online Account Opening: MeridianLink’s Xpress Accounts

Below, Jim Johnson, the vice president of member services; Julie Carrier, the manager of the MRC; and John Garner, vice president of lending, share their best practices for lending in a virtual network and highlight where their institution and the industry is moving in the years ahead.

How has 3Rivers evolved in its use of virtual channels, from the early days to your current capabilities? 

Jim Johnson: We’ve been offering web-based loans for about 12 years, but the process used to be fairly clunky. Things really started to change positively for us when we moved to MeridianLink’s Loans PQ loan origination platform in June 2011. This gave us a more effective web application than we ever had before. In the old days, loan information was not easy to pull out of the system and work. Now, we can actually assign our web loans to their own category, track them, and generate reports on them just like we do for each of our branches and the call center.

Julie and I had talked about creating a web-based eServices group for about five years. We hadn’t seen a decrease in the number of loans running through our traditional branch network but we wanted to meet the member at their point of engagement. If that member wanted to engage with us via a virtual channel, over the telephone, or through the website, we wanted to be able to meet that need. That’s what precipitated our design of eServices and our new loan origination system. 

When Loans PQ came about we also got John on board. So it started from the discussions of a couple of people, and then we were able to eventually staff the department and start assigning web loans to this group.

The eServices team is primarily doing loans, but it operates under the MRC, which also takes calls, does fraud fulfillment and is really a service center group. The MRC’s overall goal is to provide a much better experience for the member online, and eServices is a part of that.

We knew if eServices failed we really weren’t going to lose money. But if we succeeded, the rewards would be substantial. We ended up dramatically exceeding our own expectations. The loan volume from eServices in 2010 was around $300,000 month. Last year, we did around $1.3 million a month. 

Tell me about your strategy for staffing and team building in virtual channels — how is it different from a branch model? 

JJ: We wanted to start small and then see what would happen. I asked Julie to select two individuals from her team that not only had some experience in lending and could start the application process, but also analyze it as they go. We needed them to be able to uncover any potential issues and also find ways to make that experience better for members. Both employees came over from the call center, but one had some previous experience in a branch as well. 

Julie Carrier: The two employees in eServices are complete opposites as far as their talents, the way they work, the way they communicate, and the way they think strategically. Having that diversity allows you to get a more complete understanding of what will and won’t work in a virtual scenario. 

John Garner: From a training and development standpoint, we were able to focus on these two individuals succinctly as they were getting their feet wet. We were able to help them from a coaching standpoint and get very systematic as we highlighted our expectations for the role. Things ended up being pretty consistent, despite the fact they were working in a completely new environment. 

Interacting over the web or telephone is much different than face to face. The employees are trying to build rapport, but we still need them to ask important questions and get that extraction of data that the credit union needs to make good loan decisions. They also needed to be able to effectively communicate with the underwriting team regarding these interactions.

JJ: When someone applies for a loan online, we rarely talk to them in person. Most of the communication is through web messaging, and it’s amazing how much information members are willing to share with us that way. For example, a while back we did some research into some outstanding loans with unperfected liens, but our eServices group turned out to have had very little issues, if any, with that. They’d been able to more efficiently follow up and gather the correct information from the start, and members had been comfortable sharing that info with them, without ever actually talking to them. 

Do you have any plans to build out this unit further in the months or years ahead?

JJ: Volume is going to dictate whether we grow this team moving forward. But I put out a challenge last year because I think both employees are capable of producing, processing, and handling at least a million dollars a month each. We haven’t gotten there yet — but we’ve come close — and I think some very specific marketing pushes will help us make that happen. Last week we introduced a new outbound calling plan that this team is also going to assist us with. It will start very slow, but it’s an outgrowth of the unique things we’re doing in the virtual channel.

Are there any limitations or drawbacks to lending online? 

JC: Because this was so new to us, we didn’t know exactly what we could expect. We were holding this team to roughly the same standards as the call center. Now, as it grows, we’re reassigning things and putting new processes in place for following up after the loan and deepening those relationships.

The good thing is that because these employees have call center experience, they’re persistent in getting documentation back from members and guiding them through any potential roadblocks or issues they are having.

JJ: In some cases, loan documentation might require a notary, but in the state of Indiana you cannot do any eSign for a notary type form. So our reps had to find creative ways to get around those challenges. They’ve learned to use the tools they have — like web messaging — to get those things done.

JG: Our members pretty much drove our success and the volume that we saw. But it’s still very new. To close a loan, they’re getting their loan documents via DocuSign. This technology is still very new to members so our reps need to be able to encourage them throughout that process and explain how everything is going to happen. 

Right now, we don’t do any type of real estate lending through eServices. Those types of loans don’t really lend themselves to the ease and simplicity we want to maintain in that channel right now.

Even though eServices is really our number one loan production “branch,” it achieved that without doing real estate, which is pretty amazing. It’s just been focusing on credit cards, lines of credit, unsecured personal loans, and vehicle loans.

What percent of your total loan growth and membership growth now comes from online channels? 

JJ: We started online account opening in summer 2011. Last year, we opened about 620 brand new accounts online through MeridianLink’s Express Accounts, so we’ve been averaging about 51 a month. The year before, we averaged 30, so people have really been catching on and realizing how simple that process is. In terms of opening accounts, the eServices department is now on par with our larger branches. 

Our loan volume has grown more than many of our branches. The main headquarters here is the loan leader, but we’re right behind them. When we look at the number of loans coming in online versus by phone, it’s about 60-40. At the beginning of the month we get more loans by phone, but by the end of the month web loans have really picked up.

The online lending option has really exploded since we first started, even though the credit union hasn’t had the chance to do any comprehensive marketing for it yet. So we sent out a survey to borrowers asking “Why did you choose to do your loan with us online?” For 67% of those members, it was because they saw a small banner on the homepage or on their online account sign-in page that said “Apply for a loan or open a new account.” The second biggest reason was that someone — not a credit union employee — told them about it. And the third most popular reason was that someone here at the credit union told them about it.

What extra steps and considerations were involved in bringing loan applications to a mobile device? 

JG: The process for members is relatively the same. We leverage DocuSign for the loan closing documents in either channel, and members can sign off either in the app itself or via an email that we would send to them.

We still use the main loan origination system platform that was designed for us by MeridianLink, so whether the member engages through a web application or a mobile one, the information is going into the system in the same format. But we’re also able to segregate that information for tracking purposes, so we can understand how many are coming from the web versus mobile. 

We recently had some members who had moved to Chicago do a car loan with us online. It was approved and then we sent them their documents. The husband signed his at his office, but later that evening when they were entertaining people at the house, they realized the wife hadn’t signed the documents yet. She was able to pop into the kitchen and quickly take care of it right from her iPhone, then get back to her guests.

What’s your remote deposit capture strategy?

JJ: We started installing new ATMs in 2009, and we exclusively use Diebold’s Opteva machines. Most of our 23 units can do remote deposit capture, but there are a few that are conveniently located next to night drops, so we didn’t spend the money there. We also introduced RDC on mobile this past summer, as well as a trial for business remote deposit capture with three area companies.

On the ATM side, in the first day a unit would be up, we’d see 50 or 60 checks get deposited. With mobile RDC, we’re seeing about 20 to 30 checks a day and it is still growing. A lot of members don’t know we have it, so we’ll be looking to do a better job of marketing that moving forward. 

Are there any frontier, member-facing technologies or services you’re excited about but that are not quite there yet? If so, what would need to change for you to consider adopting them?

JJ: We’re seriously looking at mobile bill pay from a company called Allied Payment Network. It would allow members to either scan or take a photo of their invoice, capture the necessary information, put it all into the system, and then start making payments. The company is also located here in Fort Wayne, and it could be a pretty big game changer as far as demonstrating to members what we can do for them.

We’re also paying close attention to the concept of using mobile as a replacement for debit cards. That technology really hasn’t caught on in the Midwest yet, but we’re keeping an ear to the ground. If there is interest here, we’ll be getting on board with that.

Tell me about your technology budget for eServices? How are you balancing new developments in that channel with increased efficiency measures? 

JJ: From our financial reporting team’s consideration, we’re still looked at as a cost center, even though we’re a pretty significant profit center as well. It’s hard to put a label on the MRC as a whole — we’re taking between 500 and 700 calls a day, but we’re also the primary online support team for the membership and the online support desk for issues like card fulfillment and card support.

JG: With eServices, we reallocated some of the resources we were already paying for with the MRC and turned them into revenue generators, as opposed to being just pure cost centers. From the lending side of the house, it’s the most efficient channel for us to be operating in. 

In the past, when someone would call in about a loan, the MRC was primarily doing data collection and then shooting an email out to a branch where the member could close. Now, eServices is producing the type of loan volume every month that it would take four or five smaller branches to normally achieve. And we didn’t have to add anything extra in terms of people or overhead to start generating that type of volume. 

There continue to be high profile security breaches in various industries. What are members’ perceptions of online/mobile security and how do you proactively address them? 

JC: We’re able to put an access code on our sensitive documents so when the member receives them, they have to enter that code to be able to read and sign off on them. We also have a multifactor authentication system that measures keystrokes and asks users challenge questions to validate their identity. With the technology we have and the education and awareness we put behind it, members feel very secure using our solutions. 

JJ: It’s certainly possible to be a brand new member and open an account online but the process needs to be a little more involved from a security standpoint. If we do have a brand new member opening up a new account with us, and they fail authentication, then they’ll have to talk to us.

Will brick and mortar ever go away entirely or will it remain a necessary complement to virtual channels?

JJ: I think it will definitely be a mix of both. Branches are going to remain a very important, viable channel, because one of the things we miss going virtual is that feeling of a personal touch. But that may not be as big a value point for many people who use the virtual channel. 

I’ve got a friend who travels all over the world and he chose 3Rivers because although he could be in Singapore one week and Austria the next, no matter where he is he can do business with us. He doesn’t care about our branches, because that’s not his lifestyle. If our members need someone to talk to or go see, we have that covered all over the place. But if they are looking for time-saving and efficiency, we’ve got that covered too.




March 11, 2013


  • Congratulations on your success with this important channel. You are turning some impressive numbers!
    Karen Church
  • Thank you! It's been a great learning experience. We're grateful for the talented team we have who fearlessly dive in and make great things happen.
    Jim Johnson