Outcomes
The credit union’s decision to partner with Relevantz and implement these solutions resulted in tangible improvements in their loan origination process. They were able to fund more loans faster, reduce manual reviews, and offer a better member experience while maintaining compliance and improving their loan portfolio’s quality.
30% increase in lending efficiency
Streamlined real-time decision-making
35% reduction in manual reviews
Increased member satisfaction
Situation
A large federal credit union was facing several challenges in its loan origination process. Their existing loan decisioning system had limitations that resulted in a high rate of manual reviews, impacting loan funding rates and member experience. Additionally, long-standing underwriting criteria needed an overhaul to meet aggressive approval rate and loss rate goals.
Impact
As a result of the manual reviews, loan funding rates were impacted and member experience was poor. The credit union was struggling to meet its goals in terms of approval rates and loss rates. Staff occupied with manual reviews meant they could not focus on other core activities. The slower loan origination process meant a poor member experience as decisions took longer.
Resolution
The credit union partnered with Relevantz to implement an advanced decisioning system, aiming to streamline credit underwriting, reduce manual reviews, enhance the member experience, and increase the efficiency of loan funding. We worked with the credit union to understand their internal business policies, system constraints, and guidelines.
Relevantz’s solution involved a phased analysis and implementation approach.
- Scorecard Validation: The existing scorecard was validated against other scores to understand model performance.
- Swap-Set Analysis: A swap-set analysis was conducted, comparing the existing risk score with other scores included in the validation, along with the client’s score cutoffs and risk-based pricing tiers.
- Automated Underwriting Strategy Design: Relevantz designed an automated underwriting strategy tailored to meet the credit union’s loss rate and approval rate goals.
- Instant Credit via Decisioning as a Service Implementation: An integrated decisioning system was implemented, providing flexible access to data, attributes, and scores, resulting in increased decision automation.