With a flat yield curve and tight margins forecast to be with us for a while, every credit union is looking for ways to operate leaner and more efficiently. Initiatives that can help you grow without increasing head count or save money that can be reinvested into member service are the perfect kinds to pursue in a tight market. And one of the best places to look for those pay-offs is in the area of technology.
The same Internet delivery channel that is improving convenience for your members can also help you operate more efficiently--if you leverage it to its full potential. Consider how much call volume you could off-load from your call center if members could get automatic e-mail notifications of certain events--for example, when their balances fall below a particular threshold. Electronic alerts technology allows for this capability, and credit unions that use it are seeing significant savings. Electronic alerts allow members to find out about critical events sooner so they can manage their accounts better; in turn, the credit union reduces call volume and the high costs of member notice mailings.
Many credit unions have added e-documents technology to deliver statements, tax forms, and other documents to members electronically. But few are reaping the kind of gains that are possible from this technology. Converting a healthy portion of your membership to electronic statements can translate to tens or hundreds of thousands of dollars in savings annually, in the form of materials, postage and labor expenses avoided. Yet, if your members aren't encouraged to opt in for this service--or aren't discouraged from opting out--adoption will be low and there will be lots of savings left on the table. An emerging Internet technology that should be on the 2007 "wish list" for credit unions looking to boost efficiency is e-deposits. With e-deposits, members can deposit funds online through your Internet banking, avoiding a trip to the branch and often gaining access to their funds sooner. But it's much more than a convenient service. By reducing branch traffic, e-deposits can off-load your tellers and leave them more time to cross-sell other products.
The online account opening process is another area that can yield efficiency gains. For instance, if you make it easy for new members to join and current members to add new accounts via the Internet, you'll find your staff handling less paper (since the required documents can be electronically generated and archived). With less administrative work, they can be deployed to other tasks in the credit union or spend more time building profitable relationships with members. To achieve these advantages, look for technology that speeds and streamlines online account opening, by automatically passing along the account application data right to the core system database without re-keying.
Streamlining the process of opening accounts at the branch can also result in big pay-offs. Requiring multiple steps across multiple systems--for tasks like identity checking, address verification, credit bureau checking, and so on--this process can be slow, inefficient, and error-prone. However, when you fully integrate the different systems involved, you can create an account opening process that is fast, streamlined, accurate, and encourages more valuable interactions between your staff and members.
The lending department is prime ground for improving efficiency through technology. Over the years, various solutions have emerged that automate portions of the lending process, which is a good start. If you can automate the entire lending process--from decisioning to disbursement--you'll eliminate manual tasks, paperwork, and the high costs involved. You'll also give your staff more time to focus on member needs and cross selling. With members spending less time face-to-face with credit union employees, it pays to use that time for tasks that are far more valuable than paperwork.
With so many opportunities to improve efficiency in the front office, be sure not to overlook the back office. For instance, is your IT department still running many routine jobs after hours? Then it's time to add automated scheduling software that enables you to run jobs unattended during off-hours, avoiding costly overtime. If you're using optical technology to store documents, that's a great first step; but it's only that. Many technologies are designed to leverage your optical system to deliver much greater benefits. Some solutions will enable you to scan member driver's licenses and integrate those images into your teller platform, giving tellers faster access to member IDs. Others allow you to generate electronic receipts at the teller line and store them to optical without scanning, reducing your paper supply, storage, and labor costs.
Nearly every area of your credit union has the potential to run more efficiently through the right technology. Take a look at your processes, and then take a look at the available solutions. You're sure to find many opportunities to work smarter in today's tight market.