In a general sense, automated loan decisioning is a process that allows credit unions to leverage innovative technology to speed up the loan origination process. But to truly understand why automated loan decisioning is something that so many are embracing, you must understand both the short- and long-term benefits that this technology creates.
The Short-Term Benefits of Automated Loan Decisioning
Based on how the technology itself is designed to work, it should come as no surprise that the number one short-term benefit of automated loan decisioning can be summed up in a single word: speed.
- For credit union underwriters, they can gain a better understanding of specific members and their financial situation far faster than ever, allowing them to increase approvals while accomplishing more with fewer resources. They can accomplish the same tasks they always have in a fraction.
- For members, this also helps to make sure they're getting answers to their important loan-related questions as quickly as possible. They no longer have to wait weeks to find out if they'll get the funds for that important purchase they want to make. They'll know in days, if not in far less time. That increases their satisfaction, which instantly increases their loyalty toward your credit union as well.
Automated loan decisioning also allows credit unions to increase or decrease loan approvals as needed. This allows the organization's various loan-related products to better align with their business strategy and market trends.
The Long-Term Benefits of Automated Loan Decisioning
Automated loan decisioning offers benefits that will continue to pay dividends for years to come.
- Increased consistency: When everything is still being handled manually, there is always a bit of subjectivity to the process. Yes, everyone should be following the same basic credit union policy--but one underwriter might make a decision that another would not with the same information. Automation levels the playing field by creating objectivity.
- Increased loan closure: More effective underwriting decisions lead to faster loan closures, an increase in the total number of closed loans, and more--all of which help a credit union effectively scale.
- Increased lending upsell: Based on an applicant's credit risk, a credit union can automatically offer them related products that fit both their interest and risk profile.
- Increased risk analysis: Built-in analytics offer deeper insights into credit union membership than ever before. These insights provide meaningful and relevant data that helps identify which other parts of the lending operation can utilize automation as well.
In the end, these are just a few of the many benefits that automated loan decisioning brings with it to credit unions and their members. But leaving your digital transformation there would be failing to tap into the full potential of digital lending for credit unions.
Improve Your CU's Lending Process Through Automated Loan Decisioning and More
At FLEX, we've put together a helpful guide that goes into more detail about this and other concepts--all of which you can use to play to the strengths that make your credit union unique while simultaneously exceeding the expectations of your members. To download the eBook, click the button below.
