November 17, 2022

Credit Union Execs: Offload indirect loan processing to bots

Save 500 to 7,000 hours/year processing indirect loans

Automation for indirect loans is defined as using modern digital technology, such as robotic process automation (RPA) and/or artificial intelligence (AI) to process inbound loan applications to a credit union from non-credit union members—typically those at a car dealership who need financing for their vehicle purchases.

At your credit union, processing these inbound loan applications, even when they’re funded, takes a ton of time from your loan-operations staff. How much? We’ll tell you in a minute.

This is a classic opportunity for the type of credit union automation defined above. That’s because, every day, your team must find, and sort through, a slew of new loan applications in one system, and then—you guessed it—manually transfer all of that data, field by detailed field, into another system.

Typically, the first system is the online loan origination system or LOS. And the second system is your credit union’s core.

Compounding the problem is the sheer number of fields associated with an automobile purchase. There are things like the year, make, and model of the car. Its unique vehicle identification number or VIN. Its collateral value. The required insurance. And so on.

In this article, we’re going to show you how The Lab—North America’s credit union automation authority—was able to recently automate the process of, well, processing inbound applications for funded indirect loans from car dealerships. We’ve even made a fast, fun video of the actual bot, which you can view right here:

Here at The Lab, we’ve created literally hundreds of credit union bots for our clients, such as the risk-rating upgrade bot for nonperforming loans, and the adverse-action letters bot, which you can read about in the linked blogs.

For this one—that is, the indirect loan-application-processing bot—the activity which triggers its action actually happens outside the credit union: It’s when a member walks into a local car dealership and wants to purchase, and finance, a vehicle. At this time, the dealership’s sales rep will help them complete the online application into the loan origination system (LOS); these applications get sent directly to the credit union.

And that’s when this bot gets to work.

Every day, the bot first logs into the credit union’s intranet to get started. It logs in with its own username and password, just like a person. In fact, it will have a whole “keychain” of usernames and passwords because, just like a person, it will need to log into other systems as well.

From the credit union’s intranet, the bot logs into the LOS. Important note: Credit Union bots from The Lab can use any LOS. They’re “LOS-agnostic.” So, while the bot in this example, and shown in the video, is using MeridianLink DecisionLender from TCI, know that bots from The Lab can use any LOS that your credit union uses.

Once it’s in the system, the bot brings up all the applications, and then filters its results. It just wants to see those with the current date, and whose status is listed as “Funded.” Those are the ones that will need to be processed into the core.

Starting with the first funded loan, the bot then opens up the actual PDF application form which the member had completed. The bot then reads and memorizes the entire thing. Every single field. So, while many people think that robotic process automation bots in credit unions are there solely to replace human effort, in many times, they can actually outperform humans, especially for low-level, repetitive tasks like this one.

Now the bot switches to the core. Again—we can’t stress this enough—credit union bots from The Lab can work with any core your credit union uses. It could be from FIS, Fiserv, or Jack Henry. In the video above, the bot is using XP2 from Fiserv.

Once in the core, the bot looks up to see if that applicant is already a member of the credit union. If so, that person’s record already exists in the core, so the bot will update it, instead of creating a new, redundant record. Pretty smart.

Whether the applicant is a new client or not, the bot then gets to work. It verifies all of the data. And if there are two applicants for the loan, the bot knows to use the higher credit score!

Working with the information it had memorized from the first application in the LOS, the bot then proceeds with its detailed work, at inhumanly fast speed. It fills out all the fields, including:

• Year
• Make
• Model
• License Plate
• Country Licensed
• Source of Valuation
• Mileage
• Body Style
• Color
• Key Code
• Name on Collateral Title
• Seller’s Name
• Low Book Value
• High Book Value
• Current Collateral Value
• Verification Method
• Insurance Company
• Policy Number

…need we go on? This is just a small sampling.

Once it completes all the fields, it then moves all of the insurance and application documents to the proper folders in the credit union’s shared drive.

And just like that, it switches back to the LOS, brings up the next application, opens the PDF and memorizes it, and keeps pounding away. It never slows down, takes a break, or even makes a typo, ever.

Once it’s done, it emails the credit union’s loan team with a report of all its work, including any items it couldn’t process, which require human review.

Remember how we’d teased, earlier, that your people currently spend a lot of time on this clearly automate-able activity? Well, it turns out that a typical credit union spends about 500 hours a year simply copying-and-pasting data from indirect loan applications into the core. That’s error-prone labor that takes a long time (negatively impacting member experience) and is tedious and thankless (negatively impacting employee morale and turnover).

Don’t put your people on this task any longer. Automate it!

Credit Union executives are turning to The Lab to accelerate automation/AI readiness, lay the groundwork for strategic end-to-end process/product innovation, and implement Robotic Process Automation (RPA) “bots” to automate dozens of processes. With as few as three RPA bots from The Lab, you, too, can begin implementing on your company-wide strategic innovation roadmap—and start seeing hard-dollar benefits within weeks.

The best way to appreciate the speed and game-changing power of the automation suites installed by The Lab is to see it for yourself. Schedule a free, no-obligation 30-minute screen-sharing demo with The Lab, and you’ll see RPA bots in action. You’ll learn how we do all this from our U.S. offices in Houston, with nothing outsourced or offshored, and get all your questions answered by our friendly experts. Hedge your company against employee turnover, eliminate errors, and put your organization on a roadmap to accelerate your automation and AI initiatives.

Simply call (201) 526-1200 or email to book your demo today!

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