Small tweaks lead to big changes
Use current technology and staff to increase funded loans.
Credit unions don’t need expensive technology to make drastic changes in the number of loans the organization funds. Sometimes they just need to make small changes to the technology and people they have.
“You can do just a little bit better in a few areas and it will make a huge difference,” says Kymrie Turner, vice president of direct lending at $17 billion asset America First Federal Credit Union, Ogden, Utah.
Turner and Rob Macari, director of sales, national accounts, at LSI, explored small steps credit unions can take to leverage technology, connect with more people, and fund more loans during a breakout session at the 2022 CUNA Lending Council Conference Friday in San Diego.
Some ways to increase funded loans:
- Seek out fintech partnerships. At first, fintechs were seen as competitors, but Turner says as they’ve evolved, credit unions are beginning to see fintechs as a partner. That relationship can benefit both the credit union and its members. “There are says to work with fintechs to help us be better, faster, and more competitive,” Turner says.
- Update text and email templates. Review current text and email templates and update them if necessary. Consider using “short, sweet, and to the point” messaging and include a call to action for the member. Establish expected timeframes for follow up communication.
- Create and update funding goals. Set funding goals and establish metrics to track the goals, Turner says. This will help employees understand what goals the team is trying to achieve and how progress is tracked.
- Incentivize behaviors you want repeated. At America First Federal, Turner says employees are rewarded for the percentage of loans claimed that are then funded. A minimum number of funded loans is required to receive incentives, and a metric added to promote teamwork. “What gets recognized and rewarded gets repeated,” Turner says.
- Start or enhance reporting efforts. Gather the data and review it to see the impact changes make. In January 2021, Turner says America First Federal claimed 2,618 loans, but only 54% were funded. Since implementing small tweaks and changes, the credit union claimed 4,241 loans in October 2022 and funded 87% of those loans. “It’s within our control to change and tweak some things to make sure we’re serving members better and also prepare for the future,” Turner says.
Remember, the best outcomes often are the result of pairing technology with people.
Marcari explained how LSI offers a solution that gives a member who is applying for a loan online the option to be contacted. He says 56.1% of applicants check the box for the follow up phone call. The system also reaches out to applicants who either abandoned the loan application or received an automatic denial. In those cases, 21% of non-approvals who were contacted ended up with an approved loan after contact was made and more information was gathered.
“You don’t make a dime off the origination,” Marcari says. “It’s all about funding the loan. Go the extra step.”