small business loan servicing solutions

HOW CREDIT UNION LENDING WORKFLOW BOOSTS EFFICIENCY AND CONSISTENCY

The defi Team Credit Unions, defi INSIGHT, Loan Origination Software

credit union lending

 

Optimizing workflow is the cornerstone of any industry, but it plays a particularly critical role in credit union lending. An efficient workflow streamlines the lending process, ensuring that every document, decisioning rule, and data point is accounted for and used effectively. But it also does so much more—it can also save your credit union money, boost your staff’s productivity, and improve the consistency of the decisions you make every day. 

 

So how do you know if your credit union’s workflow is up to snuff? Whether you’ve been thinking about upgrading your system or you want to check that your current system is as efficient as it could be, here’s what you need to know about the benefits of an optimized workflow. 

 

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The Benefits of an Efficient Credit Union Lending System 

When your workflow is running smoothly, you may notice a significant improvement in both your credit union’s operational efficiency and the consistency of the lending decisions you make. That’s because optimized workflows remove many of the bottlenecks and errors that frequently arise during the lending process. Fewer bottlenecks lead to smoother operations, and fewer errors lead to more consistent decisions. However, these two primary benefits also lead to other, more nuanced advantages for your credit union. 

Operational Benefits of Optimizing Credit Union Lending Workflows 

When your workflow works as it should, you’ll gain significant operational benefits, including: 

 

  • Accelerated processing and approvals; 
  • Reduced staff stress and higher productivity; 
  • More reliable data management via cloud processing and storage; 
  • Improved call center infrastructure and member communications;
  • Efficient business process automation for high volume processes; 
  • Fewer wasted resources, including staff working hours and overhead costs; 
  • Clearer Key Performance Indicators (KPIs) for your staff to follow and for managers to track; 
  • Fewer bottlenecks in the credit union lending process;
  • Adherence to current compliance standards

You’ll also make better use of your skilled staff’s time. For example, underwriters can concentrate on complex tasks that require a higher level of expertise rather than simple applications that can be automatically approved or denied based on decisioning rules. Your staff will also have more time to dedicate to your members, which could improve membership retention rates, increase cross-sales, and enable you to expand your loan portfolio.  

Decisioning Benefits of Optimizing Credit Union Lending Workflows

While operational efficiency is essential, optimized workflows can also significantly improve the decisioning process. When you combine specific, configurable decisioning rules with a streamlined workflow, the results can be very impressive. Not only can you automate the decisioning process, but you can also make those decisions more consistent. 

 

Why is consistency important? Because consistency helps you remain compliant, make fewer decisioning errors, and offer the same level of customer service to every member. In other words, it makes your decisions actionable. Here are just a few benefits efficient workflows have on credit union lending decisioning: 

 

  • Predict and manage risk
  • Structure fair loans; 
  • Categorize and prioritize certain types of applications based on decisioning rules; 
  • Use rules to automatically approve applications within moments; 
  • Have a process for handling adverse action notifications for unqualified applicants; 
  • Configure new decisioning rules and implement them smoothly; 
  • Override decisions based on certain criteria; 
  • Evaluate data trends to improve future decisions

In addition to these benefits, an optimized workflow helps you prove compliance. You can document every step of the decisioning process from beginning to end. This includes a detailed overview of how decisions were made as well as which steps were taken based on previous decisions. You can prove your accountability and perform a full audit of your decisions to improve your policies in the future. 

The Key to Better Workflow? Automation 

To create more efficient workflows, credit union decision-makers should consider automating as much of that workflow as possible. An automated workflow speeds up operations and reduces the in-house staff’s workload. It also improves decision making consistency and operational consistency, as you can configure specific rules for the system to automatically execute the same way every time. 

 

For example, if a member applies for a loan but has a credit score below the minimum score required, then the system will automatically deny the application. However, credit unions can also add other automated decisioning rules in situations like this to give applicants another chance. But by using an automated workflow, the application could be filtered through an additional set of rules, such as alternative credit data filters. These can include decisioning rules based on rental history, income, assets, driving records, and other types of alternative data, potentially opening up new lending opportunities while minimizing risk. All of this can be done without the intervention of an underwriter or another skilled staff member. They can focus their time and attention only on the processes that require a more experienced hand. 

 

Automation is the future of credit union lending workflows. It helps credit unions reduce operational costs and make consistent decisions that will have a positive impact on their members and their bottom line. This, in turn, allows them to reinvest their savings back into the credit union and improve business operations across the board, whether by expanding loan portfolios or investing in staffing to give members more one-on-one attention. An efficient workflow opens credit unions up to tremendous possibilities.

 

Getting Started

defi SOLUTIONS provides efficient credit union lending solutions. We’ll help you optimize your workflows to efficiently and consistently achieve the optimum lending decisions. To learn more, contact our team today or register for a demo. 

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