First Seen In: CUInsight
By Ben Rempe, COO, LenderClose
Gone are the days when getting a loan meant putting on your finest duds to meet with a loan officer. It’s also not helping matters that we’re months-deep into a pandemic that has made everyone wonder if putting on pants and going anywhere is a relic of the past.
If we’re really being honest, lending hasn’t been that way for years now. Lending today is …
SoFi: Click button, refi student debt.
Rocket Mortgage: Click button, get mortgage.
Kabbage: Click button, get business loan.
And yet, so many lending models still support the old way of doing things. What’s stopping today’s lenders from embracing the modern way?
Credit unions must empower their loan officers to originate, cross-sell and serve members at higher, faster levels. It’s not that loan officers don’t want to – antiquated processes are bogging them down.
By embracing digital lending, credit unions enable their staff to do much more – while at the same time increasing employee satisfaction. Tedious processes, duplicate work and menial tasks are a burden on efficiency and morale, table stakes for digitally transforming financial institutions.
Here are the five things loan officers should stop spending time on today…
Prospecting for leads. There is a time and place for cold-calling and networking, but these methods for generating new business can be very time-consuming. The truth is, your credit union has the information it needs to more effectively identify new opportunities through the utilization of data analytics. You’ve already got the information, why not let algorithms and statistical models do the work for you?
Inputting applications. Having to enter information multiple times (or even one time) is a common annoyance and time-wasting activity for lending staff. Loan applications should be prefilled by your core system, or extremely easy for prospective members to complete on their own.
Manual underwriting. Automated underwriting moves the loan process forward leaps and bounds in terms of efficiency, and even better, it often reduces credit risk. A credit union can set its own scoring criteria and let software make consistent, objective and nearly instant loan decisions. You don’t need to remove humans from the process totally to reap big benefits.
Preparing and reviewing documents. Implementing paperless lending processes with electronic document signing saves much precious time (and trees!) in the way of preparing, handling, checking and redoing paper documents. This change alone significantly increases a lending team’s capacity to process loans with the same amount of staff. Some credit unions are doubling and tripling their volume. Even more, it eliminates the risk of errors, such as missing information, and greatly improves the experience for the borrower.
Closing loans. I’m not suggesting that loan officers shouldn’t spend any time on loan closings – but they can spend much less, with better results. Remote technology that achieved greater adoption during COVID-19, like Remote Online Notarization (RON), provides for a completely digital closing process. It 100 percent eliminates time spent on paper handling, can be completed from anywhere and is very secure. Credit unions that began using RON during the pandemic received an overwhelmingly positive response from members who appreciated the ability to conduct business safely from home.
Implementing a modern, digital lending process doesn’t mean you remove the human touch credit unions are known for. Instead, it enables the highest and best use of skills that are uniquely human. If loan officers stop spending time on tasks that can be automated and digitized, they can start finding more time to create valuable, meaningful experiences for members and the community.