GRAND RAPIDS, Mich.—Can an internal contest really change the way a credit union closes loans?
According to the results of a CU*Answers/e-Doc Innovations contest that challenged CUs to see what percentage of loans they could close electronically, it can.
The contest even prompted one CU to close all of its loans during the contest period digitally.
“Auto Owners Credit Union in Lansing, Mich., surprised everyone,” said John Beauchamp, CU*Answers VP professional services, imaging solutions. “When they reported that they closed all of their loans electronically during the contest, we were stunned.”
Beauchamp said CU*Answers audited the results and found AOCU was accurate with their report.
‘We walked through each one of their loans and 100% were closed electronically. That was amazing,” he said.
What Experience Shows
Beauchamp said the results from Auto Owners illustrate just how much more lending business CUs can do electronically if they really focus on that delivery channel, adding that he believes many credit unions are leaving loans unclosed with slow manual processes and losing money due to the higher costs of manual production.
“The runner-up in the contest reached 82.54% of all loans closed electronically,” added Beauchamp. “Third place reached 70%.”
The CU*Answers/eDOC Innovations contest was called “Race to be the 1st Place eCloser.” The contests ran for one year from October 2017 until September 2018 and measured the percentage of all the competing credit unions’ booked loans completed via eSign using eDOCSignature from eDOC Innovations.
How It Worked
Beauchamp explained the contest worked by tracking every time a credit union’s loan was came through e-signed.
“We wanted to make sure we had a valid, e-signed loan,” said Beauchamp. “We then compared that number to all of the loans the credit union booked during the contest period and came up with a percentage.”
MUNA FCU in Meridian, Miss., came in second at 87%. Each CU won $10,000—Auto Owners in the hosted solution category and MUNA for in-house.
“As this contest progressed, you could see the competition growing among participating credit unions,” said Beauchamp. “They were all working closely with their staff to change their culture to close more loans electronically. It did not matter how big or small the credit union was, the contest was based on percentage of loans closed.”
“It was very interesting to see how the credit unions increased their use of e-signing from the contest,” added Mark Fierro, eDOC Innovations’ interim CEO. “I found most interesting the results from Auto Owners. We compared their loan closings from the first quarter of 2017 to Q1 2018 and they experienced a 58% increase in electronic loan closings. So this contest really had an effect on their business—and they also got more closings and got more members through their efforts, the data show.”
No Contesting Contests
Beauchamp contends contests often encourage staff to go well beyond what they perceive their limits to be.
“Plus, they are fun, it’s easier to do better when the challenge is fun,” he said. “We heard the winners took their lending staff to dinner, did special recognition, and provided other rewards with the contest winnings. It was fun. And, in the long run they got their staff more accustomed to using the e-tools with borrowers and changed their cultures.”
“The credit unions that competed in the contest gained the confidence to jump feet first into something,” said Esteban Camargo, CU*Answers content marketing manager. “And in many cases this led to great results. The goal of these kinds of contests is to get credit unions to think about things differently, have fun, and get out of their own way to improve efficiencies and compete more effectively.”