Lending Platform Offers Control
Enhanced security and the ability to change lending rules without vendor intervention are two significant features the Islandia, N.Y.-based Teledata Communications Inc.'s new loan origination and decisioning technology platform offers to credit union clients.
DecisionLender 4.0 enables credit unions and other financial institutions to configure lending parameters, rule results, permission and authority-based workflows, exception detection and tracking, reports and other functions to suit their specific business practices, the company said. In addition, DecisionLender 4.0 offers security and compliance features.
TCI's technology automates loan origination processes for both direct and indirect lenders, and supports loans for a variety of consumer products, including autos, power sports equipment, furniture, appliances and other lifestyle-enhancing goods.
“Today's banks, credit unions and finance companies face enormous pressure to generate loans in a fast, efficient, yet responsible manner,” William Nass, founder and president for TCI, said. “DecisionLender version 4.0 has been specifically developed to give lenders the control and management tools they need to originate a wide variety of loans. Just as important, our customers can be confident that DecisionLender provides the highest level of data security and compliance functionality, ensuring that lenders can meet existing and emerging lending regulations.”
The Software-as-a-Service-based DecisionLender 4.0 offers a modular architecture that enables lenders to customize features and processes. Through an extensive set of configurable tools, lenders can develop and manage specific client functions in-house. This design allows lenders to tailor the product's functionality to conform to their policies and processes without disruptions that are typically associated with software modifications.
The system captures consumer loan applications from sources such as the Ontario, Calif.-based lending CUSO CU Direct's CUDL, DealerTrack, Open Dealer Exchange and RouteOne. It evaluates applicant data against screening rules, pulls credit reports and routes applications for review. Users can also set criteria to automatically approve or decline certain loans, putting an instant response in the dealer's hands.
In terms of security, DecisionLender 4.0 operates as a Tier 4 data center and is SSAE 16 Type 2 certified. The 4.0 upgrade was a result of feedback from customers who used the previous version, DecisionLender 3.5, primarily in the indirect lending space.
Roughly 1,800 credit unions offer indirect lending today, according to TCI.
“The newest platform is more directly aligned with the challenges facing credit unions today,” Barry Kirby, vice president at TCI, explained. This includes expansion into the merchant and retail lifestyle lending space to allow credit unions to grow portfolios and further diversify. The platform can also accept branch and walk-in applications.”
“[Version] 4.0 has a lot of customizable features,” Chris Sipes, indirect lending manager for the $320 million, Marion, Ind.-based Via Credit Union, said. Via CU is currently in a beta-test transition from DecisionLender 3.5 to DecisionLender 4.0. “It has a lot of new features that make it one of the top platforms for indirect lending.”
Sipes explained that in order to change defined parameters in the credit union's current system, it has to run them through TCI, and that can take time.
“With 4.0 you have control,” he said. “It is much more open, you can set parameters on automatic approvals, automatic denials and a lot of new features that you can very easily customize.”
Among the changes that come along with DecisionLender 4.0 are:
Configurability: Lenders can manage and execute changes in decisioning strategy, criteria-based pricing and detailed rules management. They can automatically apply calculated fees, product additions, discounts and reserve modifications for greater flexibility throughout the loan process. “Credit unions do not want to come to the vendor any time a small change is needed,” Kirby said. “We gave total control to the client.”
Compliance and auditing: The second major component is built-in policy violation tracking. “One of the major areas of concern for credit unions right now is compliance,” Kirby pointed out. The new platform contains full audit reporting implemented at every stage of the application loan cycle, and for all administrative and setup functions. The feature incorporates search capabilities for reports, logs and other data, giving lenders a resource to control and audit all actions, including administrative activity. Clients can build a policy violations library and once the application enters the system, it identifies policy violations right out of the gate.
Reporting: The third major change enables lenders to create their own reports and provides real-time visibility into performance-based data analytics. This tool helps lenders gauge their organization's efficiency, and helps managers adjust lending criteria and procedures to improve operations or adapt to market conditions.
Other features include customizable alerts and dashboard pages, which provide staff with real-time pertinent information including key operational, production and goal-oriented metrics and analytics. It also provides the ability to configure workflow processes to meet evolving operational requirements, and expedite decisioning and loan processing.
The new lending system's ability to preprogram loan analytics has been a huge help, Sipes explained.
“When those applications come rolling in, you are not spending 20 or 30 minutes trying to adjust things, they just happen,” he said. “You can get a decision back in five minutes or less.”
It also gives Via CU more flexibility in terms of evaluating items such as gross and net income, payments, student loans and other factors.
“[Version] 4.0 allows you to go ahead and preprogram how to handle that,” he added. “So it cuts the time even more.”
DecisionLender also pulls debt income ratios and credit reports.
“It basically allows us to operate 24/6,” Sipes explained, who used the term 24/6 instead of 24/7 because in Indiana, you cannot sell a car on Sunday.
Via CU partners with roughly 50 auto dealerships that use either DealerTrack or RouteOne to submit applications through DecisionLender, which has the capability to make recommendations based on customized criteria. DecisionLender 4.0 also allows lenders to set up automatic approvals or denials, but Via CU elects to look at every single application.
Kirby mentioned that 93% of auto loans originate at a dealership.
“In the auto and dealership world, the ability to turn around a decision on an application is one of the top factors in who will get that application first,” Kirby said. “Our lenders, if an application comes from a dealership, respond sometimes in 15 seconds.”
Via CU plans to go live with DecisionLender 4.0 for auto lending by August 2015. TCI is also in the process of building Via CU's merchant lending platform, something the credit union plans to unveil in the next two to three months.
The system, written in HTML5, is deployable via mobile browsers.
“We have created an online application that allows a member to apply for credit and get a decision right then, but most credit unions use online applications for lead generation,” Kirby said.