Today, most of us own a smart phone and do more business communication with it than with a fax machine, unlike ten years ago.
"Anywhere" is the word growing in popularity when describing any service. Customers want to do business when and where it's most convenient. According to a recent Javelin Strategy & Research report, 70 percent of likely bank account applicants would prefer to submit a digital application. The same report states that in 2014, the number of applications for credit, auto loans, and mortgages submitted via mobile and tablet apps increased by 60 percent.
The availability of different "modes" of business communication mean that there are more options for customers but conversely, more headaches for credit unions if they cannot proactively manage the influx of information. Let's examine a typical account opening process and compare a legacy approach that employs silos with a multichannel supported approach.
Loan and Account Processing Issues
Most credit union business traditionally has occurred at the branch where applications are filled-out and supporting documents are supplied. Typically, additional documentation would be required that merit either a repeat visit or submitting the documentation via fax. Depending on the credit union's process, new documentation requirements might also occur mid-stream.
While ideally this series of document submissions would be easily controlled, it is more likely that the process involves many different employees receiving, reviewing, and processing the documents at different times so that it is prone to human error and redundancy. Even after the necessary paperwork has been reviewed and entered into the system, additional documentation might be required if certain details require further explanation and/or after the underwriting process begins.
For instance, an employee assisting with the application may not know that the member has already prequalified for a loan. If there is a problem with the application during review, employees will need to contact the member for further clarification. If there is a potential credit issue from past history of late payments on another loan, employees may need to get a formal written explanation. After submission to the underwriter, it is not atypical to require that additional supplementary documentation be provided.
Even without the introduction of new "channels" to submit documentation, the actual process can prove highly fragmented and require constant communication of status and new requirements.
Adding mobile, email, or web-based submissions of documentation can create a document nightmare with various versions being supplied at different times and to different input queues. This brief narrative provides a clear reason why the loan process takes so much time and can be frustrating to the customer.
Control and Efficiency through Automation
Let's look at a process that uses automated classification and data extraction. In this instance, we'll look at an auto loan where a hypothetical member, Amy, wants to purchase a used car. Amy goes to her credit union website and finds a web-based application. Since the application is an online form, once submitted the data is automatically input into the credit union's system and is placed into a work queue.
A credit union representative contacts Amy and verifies the information provided on the application. She then asks for Amy to submit the required supporting documentation which consists of her ID, the dealer sheet, proof of income, proof of residence, proof of insurance, and a bank statement for any other outstanding loans.
This is where the experience could fall apart, but as it so happens, the credit union employs document identification and automated data extraction to route all incoming documents to the proper queue. Let's see how this works:
The CU has already trained its software to understand what document types it manages for every type of service engagement. Identification, dealer sheets, and other supporting documents are already recognized and readily processed. Regardless of how a document arrives, the image of it is automatically identified and routed to the appropriate workflow process. For instance, an incoming dealer sheet is recognized and routed to an auto-loan workflow where key data is located and extracted from the document. This data includes the car make and model, the sales price, and name of the person purchasing the car. Once this data is extracted, it can be matched to an in-progress application and added to the car loan applicant's supporting document set. Since this filing process is automated, the dealer sheet can arrive via any mode (e.g., mobile app, website, fax, email, or hard copy delivered in-person), and the proper representative can be notified.
This same process is repeated for each document that arrives. Since this credit union has a mobile app, Amy submits a picture of her driver's license using her smart phone. This document is identified, the relevant data is extracted and validated, and it's added to the document set.
Using automated document identification through classification means that documents can arrive at any time and in any order without interrupting the workflow process. There are no sorting errors or duplicate requests for the same document since every document is safely shepherded through the process. Adding automated data extraction based upon the document ID also allows information to be applied to the system and validated against other data. By the time a representative accesses the account, documents are organized and the data is available. Because data can be validated, duplicates can be detected, and submissions of newer supporting documentation can be handled correctly.
The result is a well-orchestrated and efficient document management process.
Credit unions are more impacted than other businesses due to the significant volume of documents that must be processed when engaging with existing and new members. Each product offered starts with an application and is supported by numerous other documents that often require multiple submissions, involve multiple channels, and processed by more than one representative. With classification and data extraction software, documents can be easily identified and data extracted and validated in a controlled, customer-friendly process. The result is a faster loan approval process and happier member.
Greg Council is the Vice President of Marketing and Product Management at Parascript. He can be reached at
