For Gather FCU, LOS Technology Drives Loan Volume, Heightens Efficiencies and Member Engagement
Residents of the Aloha State have consistently polled at or near the top of the Gallup-Healthways Well-Being Index, attributed in part to Hawaii’s well-known laid-back culture.
However, aligning Hawaii’s laid-back lifestyle with the fast, ever-changing pace of today’s consumer lending environment can be a challenge. Just ask Justin Ganaden, EVP at Gather Federal Credit Union.
When you’re the leading community financial institution, with 50% market share on the island of Kauai, and you’re worried your loan approval process isn’t fast enough, what do you do?
In early 2014, Ganaden was concerned that his $510 million credit union’s one-hour loan approval and funding time wasn’t getting the job done. He hadn’t received any complaints from members and his credit union wasn’t losing market share.
However, Ganaden knew member expectations were changing.
“Sure, Kauai is a laid-back place, but the larger banks and fintech were processing loans much faster,” he recalled. “Everything was about speed and convenience, not taking off from work to come in to a branch. I felt we had to take a proactive approach. Had we not changed, I know we would have heard complaints today and lost business.”
Not only was Gather FCU processing loans manually on its core system, its online loan application functioned more like an inquiry form.
Ganaden looked at some other loan origination systems, but he was partial to CU Direct’s Lending 360 from the beginning because Gather FCU was already using the CUDL lending platform to process indirect auto loans. The credit union launched its indirect lending program in 2004 and today, indirect auto loans account for about 77% of new auto loan balances.
“We were happy with the support and service we received from CU Direct,” he said. “It was over the top. And we knew Lending 360 was more than comparable to other systems out there, if not the best.”
Ganaden also appreciated that the loan origination system included an online application feature, which he felt would drive even more loans to the credit union.
On December 1, 2014, Gather FCU went live on Lending 360. Integration with Gather’s Symitar core increased efficiency so much, average loan processing times decreased from one hour to just 10-15 minutes. Even complicated approvals are completed and processed within 30 minutes, he said. The credit union relies on Lending 360’s capabilities to processes all of its auto loans, signature loans and credit cards.
“All of our docs are integrated,” Ganaden said. “With Lending 360 you just enter the information once and it will map through to every document needed. Generating documents just takes one click, as compared to the past when each document had to be manually generated.”
Lending 360 is also prompted to calculate debt ratio and perform other decisioning functions automatically upon pulling a member’s credit report.
“It’s a combination of those little efficiencies that can add up to a lot,” Ganaden said. “Even things as simple as not having to spend time looking through a rate sheet to figure out what rate to assign; This system does it all for you, improving the entire process.”
It took staff a month or two to get fully comfortable with the new loan system, because they had been processing loans the same way for more than 10 years. But, once loan officers began using the system, Ganaden said they marveled at the fact that they had tolerated manual processing for so long.
The increased efficiency “transformed loan officers from order takers into loan counselors,” noted Ganaden.
“Rather than spend most of their time keying in information, they can take the time to really understand our members, their needs, and determine the best solutions for them,” he said.
And, those solutions have produced more sales. Gather FCU has seen increases in loan add-on products like debt protection, GAP and extended warranties. Gather FCU also uses the loan origination system’s cross-selling feature that allows loan officers to qualify members for a credit card and, with just one click, generate a second loan application. “We didn’t expect that,” Ganaden said.
Loan volume has steadily increased since 2014, when Gather FCU booked $79.6 million in new loans. Last year, new loan volume increased to $111.4 million at year-end, which represents a 29% increase in just three years.
Lending 360 has also improved underwriting, completely eliminating human error, like missed document signatures or loans booked at the incorrect rate. The system also alerts loan officers to reasons why loans weren’t automatically approved, allowing them to more easily dig in deeper to make a better-informed decision for members with credit issues.
Not only did Lending 360 improve direct lending efficiency, it gave Gather FCU’s sizeable indirect business a boost.
“Dealers like it because they get their answer and money sooner, which leads to more sales for them,” he observed. “They don’t have to worry about the member leaving their lot before everything is finalized.”
Most importantly, members love the many benefits of Lending 360.
“Sometimes within 10 minutes of submitting their app, they receive their docs via email, and that’s where we get the positive feedback,” Ganaden said. “They don’t really expect a credit union on Kauai to have the efficiency of a large bank.”