Credit Union Growth 3 Levels of Loan Decisioning Automation & What is Best For You


3 Levels of Loan Decisioning Automation & What is Best For You

optimize loan decisionsAutomation has transformed the loan-decisioning process, changing the way credit unions evaluate loan applications. Because each credit union has different needs, they require a varying amount of automation. This article uncovers three levels of automation with differing amounts of human and machine involvement. From basic to cutting-edge, each level brings a greater degree of efficiency, accuracy, and fairness to loan decision-making, helping you determine the best way to incorporate automation into your process.

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Level 1: Human Decisions Supported by Machine-Generated Input

The first level of automation requires a high level of human involvement and low level of machine-generated decisioning. Machines give input, but humans make the ultimate decisions. This method helps credit unions make informed and up-to-date decisions.

This level is perfect for credit unions that want to get comfortable with automation. If you are not ready to go fully automated, try this first level of automation to slowly incorporate it into your strategy. Level one allows you to test out the strengths and weaknesses of automation in your unique loan decisioning process, and find what works best for you. 

Level 2: Machine-Generated Decisions Checked and Verified by Human Employees

Level two requires more machine-generated decisioning and less human involvement. The relationship between automation and human supervision at this level is that automation does the majority of the work, while the output is constantly monitored and checked by employees. This high level of involvement from machines creates more efficiency, consistency, and objectivity in the loan decisioning process than found in level one. 

Level 3: Machine-Generated Decisions With Minimal Human Supervision

At this level, the data and metrics generated by the automated loan decisioning process are being reviewed over a long period of time. Employees no longer review every single decision. Instead, they look for trends and confirm decisions in batches. Everything is being presented to them by way of a report, and they can see both what works and what doesn't. The process is adjusted when needed and results are improved over time. 

This level of automation in the loan decisioning process can help your credit union grow and become more efficient. With the right technology and training, automation can be a helpful tool in your loan decisioning process. 

Embrace Automated Loan Decisioning

There is not one right was for you and your credit union to fully embrace something like automated loan decisioning. Let the needs of your credit union and its members dictate the level of automation. 

Overall, one of the great things about automated loan decisioning (and indeed, about digital lending for credit unions in general) is that the technology is inherently versatile. You can apply them in different ways depending on your organization and come out with unique, beneficial outcomes.

The team at FLEX has recently authored a guide that outlines the possibilities that are inherent when you embrace concepts like digital lending with open arms. To find out more information, click the button below to get started.

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Preston Packer

Written By: Preston Packer

Executive Vice President | CMO at FLEX Credit Union Technology
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