Everwise Credit Union Increases Loan Approvals by 47% by using “Consumer Permissioned” data through the Conductiv Platform
I recently had the opportunity to participate in an excellent webinar hosted by the Filene Research Institute called “Testing A Solution to Improve Loan Approval Rates.”? Kudos to Megan Freshour, Incubation Director at Filene, who set a lively pace and prompted an insightful discussion with guest speaker, Christina Williams, VP of Loan Operations at Everwise Credit Union, an early Conductiv customer.
According to Christina, Everwise had been looking for ways to generate more loans and enhance the customer experience. They knew that a significant number of applications were being abandoned due to delays in processing, arising from the manual collection of income “stipulations,” before approving or funding a loan application. Everwise also wanted to provide their front-line employees with tools to add efficiency and boost performance. Ultimately, they wanted to be able to say “Yes,” more often, to applicants.
Christina admitted she was skeptical at first about buy-in, as well as the willingness of the member to share data digitally, but in both instances, she was gladly proven wrong. Once she advised prospects and members about the benefits of first-party data, she immediately knew something good was happening as positive responses started coming in. The first 90 days of Conductiv showed a 30% “take rate” – as in ‘yes, we’ll share our information and provide account access.’ (Mind you, both the applicant and the lender using Conductiv’s solution can control what kind and how much data they want to share.)
Everwise Credit Union is already seeing strong results:
As for internal reception, Christina cited a manager with 45 years of tenure coming up to her, enthusiastically wanting to apply Conductiv technology to Home Equity Lines. (So much for fear of technology by mature financial leaders. On the contrary!) The timing is ideal for innovation. Research shows the percentage of U.S. fintech users grew from 58% to 88% between 2020 and 2021, pointing to 52% growth in just one year. As an example, one fintech aggregator powers 7,000 financial apps and connects to more than 12,000 financial institutions.
In terms of data management, Christina explains that Conductiv data files go directly into their documents and record retention systems, integrating seamlessly with their Loan Origination System, MeridianLink. “I love this technology and what it can do,” she says. She also envisions Conductiv’s solution driving deposit growth in the future.
For those of us who indulge in lofty thoughts, it was grounding to hear Christina touch on two very practical aspects of future use of the Conductiv technology: (1) when qualified applicants visit a branch office but forget to bring important documents and (2) when those trying to deceive, visit a branch office under false pretense. Conductiv’s digital identity verification can help prevent fraud.
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“Even if we could approve a small portion of what we are declining or abandoning now, it will be worth our while to spend the time and investment to integrate Conductiv into what we do as an organization.” – Christina Williams, Everwise
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How Permissioned Data is Becoming a Win-Win for Lenders and Borrowers
In developing Conductiv’s decisioning platform for loan processing, we drew from our team’s experience in finance, technology, and transactional operations. We knew that gaps in applicant information were a deterrent to efficient loan approvals and were frustrating to both lenders and borrowers. The Consumer Finance Protection Bureau states that errors in the credit file is the #1 complaint.
Seeing an opportunity to fill this gap and help financial institutions simplify and accelerate loan processing, Conductiv embarked on ways to gather, secure, and deliver permissioned data (that is, personal data willingly shared by customers or members). Such data can include access to employment data, bank accounts, income tax returns, and assets.
We were realistic in our expectations: would people embrace this idea? For so long, we’ve been taught to share nothing -- but what if this perceived barrier could be transformed into a benefit?
As a white label, turnkey solution, Conductiv can collect this information -- and do so without requiring any IT resources from the lender.
Because data about financial behavior, payment patterns, and nontraditional sources of income largely do not appear in Credit Bureau reports, credit-worthy applicants across all credit bands, including low-to-moderate income groups, as well as the self-employed, are often denied loans based on the most cursory criteria. This results in a loss of business for the lender and an unsatisfactory experience for the consumer.
Through Conductiv’s use of alternative data and machine learning (AI), organizations such as Everwise Credit Union can now probe more deeply, with less risk and more accuracy, do less manual work, identify more qualified borrowers, and approve more loans.
?— Gopal Swamy, CEO, Conductiv
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Managing Consultant @ Mastercard | Advisors Business Development Banks and Credit Unions
1 年Go Gopal!!