The following article is an excerpt from a broader analysis of Internet Strategy by Callahan & Associates’ Vice President of eCommerce Scott Patterson. To view the study in its entirety, and gain exposure to a whole array of innovative new technologies through other key analyses by industry experts, consider purchasing Callahan’s 2004 Technology Survey.
One of the most important benefits the Internet can bring to credit unions is improved efficiencies through more centralized, automated, and cost-effective processes. Unfortunately this operational benefit has, until now, taken back seat to the priority of delivering front-end Internet solutions to members.
An example of this evolution is the online loan application. The first generation of Internet loan applications typically required the re-keying of data or, at least, a manual batch process to send the data to the host system. While these applications were convenient for the online member, they created an entirely new set of internal procedures for the credit union. When these systems evolved to include instant-decision technology, a similar inefficiency developed due to varying scoring procedures based on where the loan application originated.
Today, credit unions are streamlining these disparate channels into a single application process where all data is linked directly to the host system; and approval decisions are determined through the same engine for all channels. Credit union branch personnel now use the same online application system that the members use. Because these systems are now linked to the host system, there is minimal re-keying of data, saving time and reducing barriers to complete the process. The simplicity of this application has prompted some credit unions to provide members in branches an option of filling out the application for themselves using a kiosk or MSR terminal.
Leading credit unions of all asset sizes are embracing a new wave of Internet technology. Through e-Service, the Internet will help credit unions become more efficient organizations, and the Web is quickly becoming many members’ preferred channel for interacting with their financial institution. An individual credit union’s success will depend on how successfully these Internet strategy concepts are applied.