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From the moment they start to fill out an application, borrowers expect the entire process to be frictionless and easy .
data and scoring models — to create models that can be quickly evaluated in market and revised if necessary. Digital lending technology is improving, allowing more approvals with better results in the form of fewer collections. One lender told me his credit union is using this technology because their goal is to attract a younger audience and make better decisions about them. The bureaus have been accumulating data sources and tools, and data scientists are creating models, all of which provide capabilities that credit unions don’t have on their own. It should be noted that the three credit bureaus are quite different from each other. Experian has a homegrown product that consolidates data in the company’s platform. TransUnion has a different approach centered on partnering with various platforms, while Equifax has its own tools. All the capabilities the bureaus offer collectively should be seen as an arrow in the quiver for credit unions. Origence is partnering with all three to deliver digital capabilities that help credit unions advance their lending programs and member experiences. Technology That Delivers Financing is evolving to take place in the palm of the borrower’s hand, and the playing field is shifting dramatically. As the lending process and experience continues to transition to digital/online, credit unions need to be positioned to take full advantage of the technology available. Credit unions have low cost of funds and great rates, so they are more than capable of competing as long as they have the technology to remain at the top of the funnel for indirect and direct lending channels. In this new world of AI and decisioning, with shifting channels and speed, credit unions realize they need to be automated. But the movement to get there is far from complete. As more data converges, the models get better and allow decision rates to increase. As this happens, it is mission- critical for credit unions to increase their auto- decision rates.
In this new world of artificial intelligence and decisioning, credit unions realize they need to be automated . But the movement toward the goal is far from complete.
Lending and Credit in a Digital-First World
The technology will continue to be refined, and risk underwriting predictability will improve. AI models can parse through more data and catch factors that humans cannot. This will only increase the rate of change. As a lender, having the right data and the right tools allow you to see the trends and adjust more quickly. This is a core capability that lenders will need to master as the digital world continues to progressively change the lending landscape. Discover how Origence can help your credit union reimagine lending. ▪
Last year, I moderated a panel at the Origence Lending Tech Live conference that addressed reimagining lending and credit in a digital-first world. We brought together experts from the three credit bureaus — Kathleen Maley, vice president, analytic products for Experian, Blake Woods, senior advisor at TransUnion and Thomas Aliff, senior vice president and risk consulting lead for Equifax — along with Mike de Vere, CEO of Zest AI. Origence announced a new partnership with Zest AI during the conference, giving our credit union partners access to artificial intelligence-based decisioning and credit scoring methodologies. The panelists brought a fascinating perspective on the data assets that they have developed and how credit unions can use them to become better players in the digital market. We all know the Covid-19 shutdown increased the adoption rate of digital tools. Credit unions want to know what tools are available and should be used, such as robust AI modeling and trend data. The main takeaway was this: While credit unions still need to follow the basics, such as verifying income, auto-decisioning rates need to increase. AI is playing a big role as lending evolves, helping to lower risk while improving efficiency. In addition, credit unions need access to credit reports, verifications and other valuable data integrated with their digital origination platform. Credit bureaus and AI companies in the financial services space are focusing on decisioning as a service, which is front and center with lenders. This means taking custom scoring models and leveraging various sources — AI,
Additional Resources • Lending Tech Trends eBook • Origence arc overview • SunWest Credit Union Success Story
About the author Aleks Bogoeski is the SVP, Product & Partnerships at Origence. Aleks is a digital native and enjoys modeling new business ideas through the application of technology. He has maintained a proven track record in the software industry that includes automotive lending, automotive retail and most recently the Fintech startup arena. Aleks serves as the senior executive that sets the company’s strategic partnership direction. He also develops and executes on strategic and referral relationships that contribute to Origence’s growth in the automotive and consumer sectors and leads the company strategic acquisition efforts. Prior to joining Origence, Aleks held other management positions that include: Co-Founder and VP of Sales at AutoGravity Corporation; Consumer and Lending Digitization at Mercedes Benz Financial Services USA LLC; and Technology Integration Consulting at Accenture.
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Digital lending technology is improving, allowing more approvals with better results in the form of fewer collections.
38 THE FINANCIAL BRAND INSIGHTS SPRING 2023
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