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Decisioning Technology: the foundation for deeper connections, improved user experience, and increased agility

Prior to the influx of fintechs, credit unions were the friendly face of finance, a distinctly different entity than the faceless giants of Wall Street. Credit unions could thrive as the local alternative, the place where customers were a name and not an account number. But, as fintechs emerged, that competitive advantage quickly disappeared. Fintechs provided a new option, a financial services choice that wasn’t aligned with traditional banking and where services were personalized, instant, and available from the comfort of your own home.

To thrive in this world of new competition, Credit unions need to look to technology that enhances the relationships with members through more personalized products, instant availability, and the ability to meet members’ changing needs.

With that in mind, I’m going to focus on five areas where decisioning technology can bring instant benefits:

Risk Analytics: Reduce risk and make smarter decisions

Approving new accounts, decisioning loans, assessing repayment ability, your teams assess risk every day, but do they always have the data to make the most informed decisions? Decisioning technology can fully automate the entire decision process. From pulling in data, such as account information and credit scores, to running the application through data models to accurately predict risk. Processes can include fraud checks to automatically decline questionable applications and transactions. Decisioning technology allows huge amounts of data to be processed in milliseconds, so you can be confident that you’re making the right decisions and have the information you need to ‘say yes more’ and manage risk effectively.

Agility: Easily make changes that drive your organization forward

When people talk about business agility, the focus is often around how the business can improve its ability to respond to markets and protect itself against threats. Obviously, this is incredibly important for credit unions as their members expect stability and security from their financial institution. However, there’s another aspect of agility that is hugely valuable to credit unions—the ability to quickly and easily adjust business processes and products to serve members’ evolving needs.

When decisioning technology is business-user-friendly and easily managed by your credit union team, your organization is empowered to rapidly update processes, including integration to new data sources, adding new score cards, implementing risk models, and changing workflows. This control gives you the power to quickly update existing products and perhaps, more importantly, get new products to market at record speed. It’s the power to create the right products and launch them at the right time that gives you the agility to better serve your member needs.

Approval Speed: Say ‘yes’ in real-time

In the paragraph above we talk about providing the right product at the right time, but we need to go one step further to truly increase the value credit unions offer to members: real-time approvals. Yes, products are important, but timing is everything. Offering the right product becomes irrelevant if your member has to wait days or even weeks for their application to be processed. With automated decisioning you empower your organizations to make approvals in real-time. And, with the elimination or huge reduction in manual processing your team can focus on the user experience and build stronger relationships with applicants. Your members will be significantly more satisfied with the interaction and get access to services exactly when they need them, reducing the risk that they’ll look to your competitors to provide solutions.

Member Interaction: Extend the personal experience to digital channels

One of the biggest advantages credit unions have over both huge financial institutions and new Fintechs is brand loyalty. Your members are loyal to the personal experience your credit union provides, it’s local, it’s friendly, and most of all it’s conversational not transactional. To compete in today’s digital-first world you have to take that experience online, personalization needs to extend from the in-person experience to the digital experience. The biggest fear of making services digital is losing that personal touch, but think about how technology helps the world stay more connected, whether it’s emails, text messages, or even video phone calls. Digitization doesn’t need to make you more distant, in fact, it can help you know when and how to connect with your members to best serve their needs.

So, what’s the role decisioning technology plays? Decisioning solutions, like Provenir, are able to process an immense amount of data pulled in from a huge range of sources. So for example, you could use data from your Customer Relationship Management system in conjunction with decisioning tools to identify the best time to reach out to members for cross-sell and up-sell opportunities. You could use decisioning tools to help predict when members might become a default risk and need financial advice. You can even pre-approve members for new products before reaching out.

Basically, decisioning technology is a tool to help you create a personalized experience on a mass scale. It extends the personal touch to the digital world so you can offer the right products at the right time, and, connect with members exactly where they are, whether that’s on their living room couch or relaxing by a campfire in the middle of nowhere!

Greater efficiency

The manual processing of loan applications, payments, or even member onboarding, is extremely time-consuming. Fighting legacy technology to meet the demand for instant approvals can quickly eats into profits. Delays implementing risk strategies to mitigate losses and prevent fraud increase your risk of financial losses.

Whether it’s manual processing, legacy technology, or a combination of both that’s slowing your business down, low-code decisioning technology can provide the foundation to drastically improve efficiency. With software that lets you rapidly make changes, automate complex processes, and manage risk you can quickly implement innovation strategies that provide more attractive services to your members.

Take the one-to-one conversations you have with members and seamlessly scale that to one-to-many while maintaining the personalization that’s at the forefront of your success. Let technology process the loan details in milliseconds while your team builds relationships with applicants. Take the money you save on manual processing, technology challenges, and fraud losses, and reward your members with improved loyalty programs.

Advice on Going Digital: Digitizing your Decisioning the Right Way

To conclude this article, I wanted to leave you with two pieces of advice to help you successfully implement digital decisioning: Choose your partner carefully

While this may sound obvious, it’s always important to do your due diligence when choosing a technology partner to help you implement your digital risk strategy. As I aid at the beginning of this article, Provenir is not going to be the best fit for every credit union in the US and Canada. Why? Because the needs of every credit union are different, and in some cases that might mean that our competitors or an internal build are better suited to your needs. So, do your research, your technology partner should be open to honest conversations about what they can and can’t help you with. And, if they promise to do everything, instantly, it’s probably too good to be true! Think strategically about implementation

Implementing new technology can be overwhelming, work with your decisioning technology partner to take a strategic approach to implementation. Take the quick wins by launching new processes in specific business lines or departments. A phased approach to implementation can help you ensure success and a rapid return on your investment. You can then strategically expand the technology into the rest of the organization!

Kathy Stares is Executive Vice President of the Americas at Provenir, a leading risk analytics and data science software company. Kathy has twenty plus years of experience as a leader in the financial services industry with a strong focus on building strategic partnerships between technology and financial services organizations. She’s passionate about driving innovation and building world-class consumer experiences. 

This content is for CU BUSINESS eMagazine + WEB ACESS and THE TEAM BUILDER (GROUP SUBSCRIPTION) members only.
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