According to one recent study, credit union earnings fell significantly in the first quarter of 2023. This was true despite the wider interest margins that were being seen across the industry.
Increased operational expenses. Lower than anticipated loan sales. Higher losses from the loans that already exist. There were a myriad of different reasons for this downturn and it was so widespread that chances are high your credit union had a similar experience.
Want to Have a Stronger Quarter? Implement Digital Lending NOW!
Thankfully, technologies like automated loan decisioning exist that can help make sure the next quarter looks a lot better than the first one.
The Impact Faster Loan Processing Can Have On Your Credit Union
Right off the bat, the largest benefit of automated loan decisioning for credit unions is that it allows employees to analyze loan applications--and a member's creditworthiness--faster than ever before. That leads to faster lending decisions, which helps increase a credit union's bottom line. But there's more:
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Improving Accuracy: Automated loan decisioning also takes into consideration factors like credit scores, income, a member's employment history, and more. This can help your credit union make better decisions regarding loan approvals, which reduces the risk of default and helps organizational leaders better manage their overall portfolios.
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Offering Superior Cross-Selling Opportunities: One efficient way to help boost your credit union's quarterly results involves embracing all cross-selling opportunities that present themselves. Automated loan decisioning helps enormously with this by evaluating a member's overall financial profile. This allows you to identify those products that are hyper-relevant to their needs, increasing the chances that these offers will be embraced.
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Personalizing Loan Offers: On the subject of specificity, automated loan decisioning also helps dramatically with generating personalized loan offers for members. Again, based on someone's creditworthiness, income level, existing relationships, and other factors, it allows your credit union to generate the types of personalized offers that members don't just want, but need.
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Reducing Operational Costs on a Daily Basis: One of the fastest ways to make sure that the next quarter is better than the current one involves reducing operational costs wherever you can. Automating the loan decisioning process helps do this by virtually eliminating the need for manual underwriting, streamlining operations in a way that naturally reduces a credit union's operational costs. It also frees up the valuable time of employees so that they can focus more on matters that generate additional revenue.
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Mitigating Bias and Improving Consistency: Automated loan decisioning can help improve your quarterly results by minimizing bias and improving consistency in the process itself. Its functions are based on pre-defined rules and algorithms--not on "gut instinct" or "intuition." Automated loan decisioning prevents decisions from being made based on subjective judgments, instead relying on objective and precise information. facts.
Achieve Quarter-After-Quarter Success with Automated Loan Decisioning and Cutting-Edge Technology
Overall, automated loan decisioning is just one example of how to leverage cutting-edge technology to your credit union's advantage. By improving your organization's efficiency, you improve the member experience--both of which can't help but lead to better results, quarter after quarter. The team at FLEX has recently authored a 360 Lending eBook that goes into more detail about this and other important ideas. To find out more or to get started utilizing these advancements for your own benefit, click the button below.
