By Ray Birch
IRVINE, Calif.—It’s been well-documented excessive “friction points” have been hurting perceptions of credit union service, and now there is another growing pain point that needs to be addressed—the funding of loans, according to Origence.
Brit Barker, senior vice president of sales with Origence, told CUToday.info that at its core the issue is members are not getting their loan dollars quickly enough, and that’s hurting credit unions in the eyes of consumers and leading to lost business.
“I get approved for a loan from the credit union, I had a good self-service experience, but in a true self-service model—which consumers expect today—that includes getting my money quickly,” said Barker.
Barker emphasized members want to be able to complete their loan with their phones and laptops, all the way from application through funding.
“I want to be able to do it all myself without engaging with lending staff,” Barker added, noting Origence has digital solutions that seek to help credit unions streamline and digitize the entire lending process.
It’s the lending channel that has become the battleground for credit unions and other financial institutions seeking an edge over the competition, according to Barker.
“We’ve been talking with a lot of our credit union partners about the member experience, what they are doing, and want to do, to improve the experience, the hurdles they are encountering, and how technology can help drive that experience,” Barker explained.
The ‘Game Changer’
Brit Barker
He called that the online channel the “game changer” for credit unions.
“Credit unions have traditionally done a great job of offering a very satisfying member experience in the branch or via the call center. But increasingly, members want to interact with their credit unions online—but are credit unions meeting expectations?” Barker asked. “Many credit unions are still searching for that right combination of technologies to deliver on their own unique experience and brand promises. What are the key factors in driving a lending strategy that will ensure credit unions are well-positioned to win in the marketplace now and in the future?”
Barker explained that when it comes to specific transactions, like personal loans, Origence data show that in 2018 about 30% of the loan volume running through its systems was coming from the online channel.
“Today, almost half of all product requests come from the member through the online channel, and it’s only going to grow exponentially,” he said.
Strong Authentication Needed
Barker said a big step forward for credit unions is to trust strong authentication systems.
“You have to recognize that members anymore are not wanting to come in the branch for a loan and talk with you face to face,” he said. “Your (online loan application) fraud detection tools have to get you to a comfort level where you are confident that I am who I say I am. OK, so there’s a 90% chance now I am who I say I am, and I want a $5,000-limit credit card. OK, no problem.”
Barker explained that when it comes to issuing cards credit unions need to give members the experience they are accustomed to getting from major players, such as Apple. While greater authentication scrutiny is needed on large consumer loans, “For a small line of credit you give that to them all day,” he said.
Barker reiterated that most credit unions are performing well and making the process simple for the opening of the credit application.
The Need to Streamline
But when it comes to funding CUs still have too many checks and balances that must be streamlined.
“With many credit unions now I can't really get an experience like you get with the Apple Card—three or four clicks and I am done,” he said.
Streamlining the lending process requires focusing on several areas, including the core system, the online banking platform and the loan origination platform, Barker told CUToday.info.
The application process must also be scrutinized, Barker added.
“How am I going to make that application so easy and simple, and prefill from whatever source it might be—whether it’s online banking data or from a photo of driver’s license,” Barker said.