Using Tech to Improve Rural Financial Health

Part of what makes credit unions’ commitment to members so extraordinary is how far many of them will go to service their base. At Appalachian Community Federal Credit Union, for instance, house calls are made to service members of underserved communities.

The $233 million, Gray, Tenn.-based, socially responsible ACFCU deployed IMM eSign for Credit Unions to provide modern, financial tools and services to underserved individuals and businesses in rural Appalachian communities.

ACFCU’s community includes a service area of roughly 260,000 residents; twenty-six percent live below the poverty line, and 28% are unbanked or underbanked. Many major banks left the area due to a lack of population and the high cost of providing adequate bank services. Additionally, the lack of viable brick and mortar banking services left many area residents vulnerable to predatory lending.

IMM eSign from the Rahway, N.J.-based IMM, which specializes in e-signature and digital transaction solutions for financial institutions, allows institutions to deliver a complete, end-to-end digital processing environment and eliminate virtually all paper-based procedures in favor of electronic transaction handling. Credit unions use the IMM solution to simplify the account opening process, streamline loan originations and lending disclosure delivery, and facilitate digital loan closings.

ACFCU, which serves areas in northeast Tennessee, southwest Virginia and eastern Kentucky, positioned itself where traditional brick and mortar locations are not easily accessible. “Together with IMM, the credit union now provides traditional loan products to members in even the most remote locations,” Joe Jackson, ACFCU’s vice president of technology and electronic services, said. “Our partnership with IMM has been instrumental in advancing our mission to improve the financial health of our community.”

IMM eSign works with the credit union’s online loan application and loan origination systems, enabling users to complete and submit new account forms, loan applications or loan closing documents from anywhere. In 2015, ACFCU originated $62 million in loans, 95% of which were to members of underserved communities.

“The other part is the few financial institutions that are in these remote areas are feeing people pretty heavily for the use of their services,” Jackson noted. “We’re offering debit cards, checking accounts – all the services that don’t cost anything for members to access their money. Having us do that and come into these areas was huge.”

Members can complete transactions in a digital, self-service environment at a time and place that’s most convenient to their schedule, regardless of the branch’s operating hours.

“The idea came about as we had completed a merger in 2012 of another smaller credit union,” Jackson recalled. That credit union had a much larger area of membership but lacked the resources to open branches throughout its service area. After the merger, ACFCU wanted to reach the rest of this potential membership without opening additional physical branches.

During the merger, ACFCU picked up an associational field of membership by working with the Human Economic Appalachian Development Corp. (HEAD), a community development financial institution. In collaboration with the HEAD organization, ACFCU helps families, individuals and businesses across a three-state area achieve financial independence by offering expert guidance and solutions.

Jackson recollected the credit union had a theoretical region mapped out of several different counties in the area that were not in its community field of membership; residents in this region could become members if they joined through HEAD.

“We are able to give [HEAD] the ability to offer our services. And even if we are not there, they know how to go through our online account opening platform and do the signups,” Jackson pointed out. ACFCU, using IMM’s e-signature platform, then provides the tools to obtain signatures on documents and snap photos of identification cards as part of the onboarding process.

Prior to using the remote application, ACFCU used IMM’s e-sign capabilities for basic loan document signatures. Post-merger, it decided to begin using it to collect signatures for membership documents as well.

Through its community outreach partnership, the credit union not only has ATM locations but a place to meet with current and prospective members to provide financial literacy information and services.

“[HEAD] actually makes house calls if a member can’t come to them,” Jackson said. “We’ll set up a second appointment to go out and meet with [individuals] and then do the online account enrollment. We need to see they have some interest in becoming a member of the credit union.” ACFCU employees also have the ability to sit down with people and discuss membership, and, if need be, fill out their membership application using a tablet. The credit union receives actual signatures – it outfits its reps with tablets and styluses to sign documents electronically.

ACFCU also participates in large offsite community events and worksite locations, where representatives are sent equipped with tablets to guide folks through the membership process. One large area employer provides its company break room or lounge as a place for the credit union to meet with employees. “I don’t know of any other financial institution in the area where the employer is actually helping it sell its products by talking to its employees during the onboarding process,” Jackson said.

“It’s just a great story,” Philip Elwyn, vice president, client and partner success for IMM, said. “What’s so interesting about the Appalachian story is not just enhancing member experiences, but actually enabling them in the forms of outreach that they’re doing.”

Elwyn acknowledged IMM’s technology is there to enhance and enable member experiences. “ACFCU is taking this to another level [by making] visits to homes and businesses, being aggressive in doing this and [doing] a great job of it. Appalachian is showing some uniqueness in their business model.”

Jackson explained ACFCU fully deployed the IMM eSign for Credit Unions platform’s loan-document signing piece in all of its branches. However, he admitted a lack of capabilities in its current core prevents the credit union from using 100% of the electronic document signing functionalities. “IMM’s product has tons of capabilities that we cannot even tap into yet.”

The credit union expects its conversion to Corelation’s KeyStone core platform toward the end of the year will enable ACFCU to utilize additional technologies to build its remote field of membership. “We needed to leverage a more current, relevant, technically-advanced core that will give us flexibility to do more than what we’re doing right now,” Jackson noted.

Elwyn indicated IMM products are device and core agnostic. “It’s really quite easy for us to move our credit union partners from one core to another.” In some cases, it is API integration with Corelation, and the core actually passes data to populate credit union documents within IMM’s document presentment engine. IMM also works with a variety of different signature pads and devices. IMM’s tech also offers server capabilities both on premise and in the cloud.

“We see technology as a way to augment our growth. It’s becoming a requirement; if you’re not keeping up with modern technologies, you’re not going to be able to compete,” Jackson said. “IMM is just one of those key partners that is giving us the technologies we need to continue to be competitive within our market.”

Jackson added, “IMM’s unique ability to interface with our existing systems ensured the digital tools and services were quickly adopted by our employees and members. The feedback we’ve received has been tremendous – the intuitive design ensures it is easy to navigate for all users, regardless of previous technical experience.”

“Appalachian deserves a lot of credit; they’re digitally evolving as they see the need for their members and potential membership,” Elwyn noted.

Michael Ball, vice president of markets and strategy for IMM, added, “Not only has the credit union been able to boost productivity across the entire organization, it has also enriched the overall financial health of an entire region by providing innovative solutions to ensure members have access to modern banking tools and services even in the most rural communities.”