Loan automation systems have saved credit union staff countless hours when compared with the manual loan tasks of the past.
And the tools used to automate lending processes are constantly evolving and improving. It’s critical, CEOs say, to thoroughly evaluate each upgrade and new automation decision. Carefully consider the benefits, challenges, and potential drawbacks of lending automation.
Retain the human touch
“Lending automation allows us to do more with less,” says James L. Boyd, president/CEO of $240 million asset Abilene (Texas) Teachers Federal Credit Union. “But it’s more important for us to keep members happy through continually building personal relationships.
“We aren’t on the ‘bleeding edge’ of automation,” he adds, “Instead, we like to pick and choose through available options to find the best fit. We’re continually reviewing methods to automate our lending process, but not at the expense of losing personal contact with our members.”
The credit union’s loan portfolio has grown during the past five years—unsecured loans increased 25%; new-vehicle loans, 21%; and used-vehicle loans, 52%. Members have options: They can initiate the loan application process online, by phone to the loan call center, or face-to-face with a loan officer at the credit union.
“Integrated media management helps us handle our loan documents, even down to the use of electronic signatures,” he says. “A vast majority of our lending is open-ended, which greatly speeds up the process and makes our members (and employees) happy.”
While Abilene Teachers Federal automates much of the process, all loan decisions are still made by humans. Boyd says his credit union is old-fashioned when it comes to members.
“Many members still want personal contact,” he explains. “We try to offer that with all our products. But my concern is, with so much automation, we could lose hands-on ethos, and that defines our service.”
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