Federal Credit Union
85% Growth in Auto-Decision Rate Improves Lending Efficiency
Credit Risk Management Solution
Situation
A North America-based federal credit union faced a critical challenge. Their manual underwriting process was cumbersome, leading to delays and operational inefficiencies. To thrive in the competitive financial landscape and meet soaring customer expectations, they desperately needed a solution that would streamline their processes and ensure they remained compliant with regulations.
Impact
Continuing with their laborious manual methods would lead the credit union to bottlenecks, delays, and increased risk of errors. The existing 34% auto-decision rate and 19.86% auto-approval rate raised red flags about the increased labor costs and negative impact on the lending portfolio, and the precision of lending judgments.
Failure to comply with regulations could result in penalties and reputational damage. Moreover, the inability to adapt to modern lending practices would have put the credit union at a major disadvantage compared to competitors in the thriving financial landscape.
Resolution
The credit union partnered with Relevantz to implement an advanced credit risk management system. We implemented an innovative solution, harnessing data analytics, cutting-edge decisioning technology, and seamless automation to streamline their lending operations. Thus, aiming to reduce errors, enhance decision-making accuracy, and accelerate the loan approval process while maintaining regulatory compliance.
Outcomes
Our intervention with an automated credit risk management solution helped the credit union:
- Achieve a remarkable auto-decision rate of 63% for loan applications, a substantial leap from their prior rate of 34%.
- Achieve a surge in the overall auto-approval rate to an impressive 45%, a significant improvement over the previous rate of 19.86%.
- Boost their operational efficiency.
- Slash loan processing times.
- Increase customer satisfaction.