ANCORAGE, Alaska-In an effort to streamline loan optimization, Denali Alaskan FCU has tapped its own in-house IT talent to build software architecture that has successfully moved it to a paperless environment and increased overall efficiency.
"This wasn't an out-of-the-box solution that we customized," said Kathy Beelmann, AVP-Central Operations for Denali Alaskan. "One of our IT employees knew how to write code and took over the project, so we started from scratch."
While the credit union began using its Loan Enhancement System (LES) in 2009, the web-based platform that was developed to facilitate electronic workflow process for consumer, commercial and real estate loans was a work in process.
"It took about one year for the software to be completed and then we began testing it internally," said Beelmann.
Realizing the software was written with non-industry code specifications, it was quickly determined that any updates or required scalability would prove cumbersome. "We decided to take it to an outside local company, Geo North, to rewrite the code using industry standards."
Engaging the outside vendor was a comparatively nominal cost that further streamlined the product and allowed for necessary updates over the last two years. "We were seeking an efficient, convenient way to go from manual reporting to paperless that would enhance the loan process with customizable review," said Beelmann.
How LES Works
The third-largest credit union in Alaska with 19 branches, 57,000 members, 314 employees and $480 million in assets, Denali Alaskan was the first credit union to offer "true" Internet banking and one of the first to establish 24/7 lending via phone and internet.
"We definitely like to take advantage of technology," noted Beelmann.
The LES software was designed to review a list of loan items assigning a point value and risk rating that is specific to the loan type being reviewed. The results are maintained within the SQL database which the program was built on. Additional perks include a statistical page that features a custom search functionality that can locate loans in any stage of the review process.
"Being able to capture the results of those loan reviews gives an opportunity to see first-hand the true quality of our loans," said Beelmann. "This information reveals strengths and weaknesses in lending practices and helps us identify training needs and modifications to the LES program itself."
Denali Alaskan has other departments that contribute to its lending pool, including Member Business Lending, Real Estate, Lending Center (an indirect lending program) and a Member Contact Center that processes all Internet and loan by phone requests. Direct Lending, Beelman explained, occurs in branches.
"The Loan Enhancement System allows us to efficiently manage all these loan portfolios with its paperless process," said Beelmann. "And capturing the results of the loan reviews is one of its greatest features. Being able to identify strengths, weakness and trends is very beneficial; a training tool, if you will."
While other credit unions have yet to inquire about LES, outside auditors and officials from the National Credit Union Administration have lauded the effort. "During our annual NCUA exams, they, along with outside auditors, were exposed to LES and think it's pretty spectacular," said Beelmann. "Now we are considering whether this will be a marketable product. We haven't put it out there yet but are curious to see what happens."
