Have to disagree with this one
Posted by Matt Dean on June 12th, 2006
“Meeting Members’ Needs Through Technology.” Sounded like an interesting topic (to me, anyway), and the speaker started off great. “Consumers are calling the shots in technology. They are more educated and demanding, and they will dictate which technologies will work and which won’t.” Those aren’t his exact words, but that was the general idea. I couldn’t agree more.
He then began to speak about emerging technologies, starting with Automated Decisioning and Fulfillment. This is where I disagree: “The system should be making the grey-area decisions for you instead of the loan officer.” Wouldn’t it be better to have your decisioning system ask the person to visit a loan officer if they aren’t an automatic “yes”? How do CUs meet the quick-approval needs of some members while allowing for those that need a CU to take a chance on them?
I recognize that most of our posts today are related to low-wealth, high-risk individuals. I mentioned this in the comments of a previous post but want to reiterate here: we’re not advocating that credit unions only serve low-wealth individuals, or that they serve them only as a way to avoid a guilty conscience. There’s a real business opportunity here for credit unions. I’ll let Trey talk more about that when he posts about “Serving Members of Modest Means.”
I don’t think that underwriters will ever be eliminated – but taking more “easy” underwriting decisions off their plate by gathering secondary info (if they aren’t able to “get to yes” using the basic information) – can only help us use our underwriting staff to personally review (and hopefully approve) more member loan applications…
I may have taken the message the wrong way. Do you find that loans that are denied using the automated systems are then considered on a case-by-case basis by the underwriting staff, or is a rejection by the decisioning system the final word?
I should also admit that I don’t have much experience in consumer lending, other than what I’ve learned while working on sites for our CU clients (and while obtaining personal loans). So please help me catch up—I enjoy learning about all aspects of the industry.
Sorry to answer my own comments on here, but I just realized why I took the statement the way I did. The speaker said something to the effect of “your loan officers aren’t consistent in the loans that they approve or reject. They shouldn’t be the ones making the grey-area decisions. The system should be making those decisions.”
I completely understand the value of leveraging technology to remove fiction from processes. But I also think that loan officers need to have at least a small amount of discretion in the decisioning process.
I have to say that Lending isn’t my area – but I believe that the more we can automate the “yes” decisions – even the “counter-offer yes” decisions – that leaves more time for the underwriters to dig in to “borderline counter-offer yes” cases….