A Credit Union View: Carefully Streamlining our Members' Loan Process to One Platform
One of the latest promotional emails to land into the inboxes around our offices recently has a message with a forward-thinking sales pitch. Yes, it’s a typical “form-letter” email, but perhaps we should pause every now and then and put some thought into even the most “spammy” of messages.
This email urged decision makers to not be the leader of a company that is “long averse to change and innovation, (and) is finally embracing the digital revolution.”
The pitch suggests we should lead our companies into something like a cutting-edge technology and latch onto the latest advance that is disrupting the marketplace.
I can tell you that Randolph-Brooks Federal Credit Union is making an impact with technology in the financial services marketplace. We do find technological improvements that benefit our membership, including processes that have increased our loan applications from 30 percent submitted online two years ago to more than 60 percent now. When it comes to car loans, our credit union members accounted for almost $600 million in sales volume last year from our Preferred Dealers List, which is a 70-percent increase from the previous year.
Those are fantastic numbers for the 13th largest credit union membership in the United States. Yet RBFCU’s vision of the credit union mission is not realized with ventures into technological practices, platforms or processes that could be faulty and disrupt our members. People, not platforms or processes, are still at the heart of what we do. That may sound obvious, but we are extra careful.
We remain totally committed to providing members with efficient, low-cost, personal financial services
We’re not the first to go with offerings of the latest technological aids for financial accounts. But we aim to be flexible and friendly when we do introduce those things.
At the heart of our success is our relationship with members. We listen to our members. We look for hot spots in the relationship between our members and the products they use.
Our Consumer Lending department calls these “friction points.” They can become problems or frustrations for our members. We’d like to think that, rather than pouring water on this source of heat, we provide oxygen to consume it so our members can ignite something meaningful toward their economic well-being and their quality of life.
RBFCU has 56 branch locations in and around Austin, Dallas, and San Antonio. A great number of our more than 725,000 members fit in with the mindset held by many consumers. They would rather get that productive fire that powers their economic well-being blazing right in front of them, right now, rather than driving to a branch.
They want us to help them more, so we go through a constant retooling to make the platform more dynamic for the members and more efficient for the staff involved.
In addition to seeing good signs that it’s working for the members, it’s positive for our staff that this streamlining of the platform has not added to our personnel numbers in these past two years. Turnover is less. Productivity is better.
We’ve been willing to listen to comments both complimentary and harsh from our members. But we had to know, “What did you want to see from your loan process? What was missing?”
We believe we have a good data pool that can help us fairly judge the reactions. In addition to the overall increase in online loan applications, we have gained insight from a couple of complementary tools. Our DocuSign envelopes for online loan applications from 2016 exceeded 27,000, and that passed 42,000 a year later (an increase of about 54 percent compared to our same-year membership increase of seven percent). Secure Messages through our membership website more than doubled in that time.
We kept putting the question in front of the members: “What are you willing to do to help your loan process?” We got those answers through Secure Message, and when members tagged comments at the end of transmissions on the loan status page. We found our members to be naturally engaged. They told us they want to stay on one platform for everything.
To complete the loan, we require confirmation of identity, verification of income, among other things that have taken members off that one platform. It helped that we undertook a deep review of the documents we required and adjusted it to a number that is essential and manageable.
In the loan process, one of the biggest “friction points” was the ability to get documentation from the member to the credit union. Asking members to fax their information in this day and age is almost embarrassing. So we implemented a document-upload process in mid-January 2018, and there were 67 uploads to that one platform of the loan status page by our members by the end of the month. In February, there were more than 1,000. We did this with no fanfare or instructions. Members adjusted because they intuitively understood the process.
So our next addition, we believe, will come this summer when we can have “in-session signing” available on the loan status page. Members won’t have to wait for a DocuSign package to hit their email inbox.
When I was invited to provide my testimony in front of the U.S. House of Representatives Small Business Subcommittee twice in the last year, I reminded the panel of one thing about credit unions that remains every bit as important today as it was when credit unions were established by Congress more than 80 years ago: we remain totally committed to providing members with efficient, low-cost, personal financial services.
That commitment means we will offer the best value to our field of membership. It’s not a secret that a low “price” sells, and people will want to become members of RBFCU when they see confirmation of a Credit Union National Association (CUNA) Datatrac report showing our members will save almost $2,000 in interest expense compared to other Texas banking institutions during a five-year term.
But there’s a lot behind the pricing of that loan. Nothing we do can add price points to that rate. We can’t pay an unreasonable service agreement with a vendor. We can’t have processes that frustrate members, and employees can’t burn time re-training and re-figuring our practices if it’s not solid at the beginning. We can’t deal with platforms that show the least hint of being less than secure.
We have to be convinced the platform works in all of those regards. We’re on the right track.