Connecting Credit Union Departments for Efficient Mortgage Operations

For most credit unions, mortgage lending is only one product in a full menu of financial services offerings. Unfortunately, due to the complexity of mortgage lending and the significant regulatory oversight that comes with it, home finance typically requires its own department, despite the fact that it may not account for a major portion of the institution’s annual revenue in comparison to other products.

Departmentalizing home finance makes regulatory compliance and delivering a high-quality member experience attainable, but at a price. Part of the price is paid in additional overhead, including salaries and facility-related expenses. But when the mortgage department is placed in its own silo, the cost also includes lost efficiencies and missed opportunities. The negative impact business silos have on marketing automation is perhaps the highest cost the enterprise pays.

Marketing Automation’s Promise for the Credit Union

The success of any enterprise depends upon its ability to consistently brand itself in the minds of its prospects, demonstrate the value of its offerings, and remain top of mind for when the prospect is ready to buy.

Marketing automation involves using software tools to increase the productivity of marketing programs. It offers many advantages to credit unions that are pursuing growth and seek to deepen relationships with their members. Banking relationships are not simple, and neither is the consumer’s approach to financial products and services, many of which they may find difficult to fully understand.

Marketing automation is particularly effective here as it increases sales and maximizes efficiency for firms with complex sales cycles, allowing marketing and sales departments to manage all prospect interactions and to create, deploy and optimize online ­marketing campaigns from a central platform.

Not every company that attempts to capitalize on marketing automation fully understands how to make it effective.

In a survey conducted by Regalix, a Silicon Valley-based customer acquisition firm, senior marketing executives were asked about the key benefits they received from marketing automation. They found it increased lead generation (84%), provided better prospect/lead insight (73%), increased efficiency (73%), enhanced lead scoring and nurturing (71%) and improved lead quality (69%).

But when member information is bottled up in a silo, it costs the entire institution. Fortunately, there are solutions to this problem that don’t involve changing the way the enterprise is structured or managed.

The Preponderance of the Business Management Silo

In an article written in 2012, Fast Company urged readers to “smash their silos” in order to build their businesses, but not before first pointing out that there are good reasons these management structures exist.

“(Silos) provide the structure that allows companies to work,” it stated. “In companies, silos tend to be places where information, focus (another word for choosing priorities) and control flow up and down.”

Traditional management structures encourage business silos. When efficiency is the goal, this type of chain of command has been a powerful tool used by leaders throughout history. But in our modern world, it also leads to some serious problems.

Some of the problems associated with business silos are non-aligned priorities, poor or non-existent information flow and lack of coordinated business decision-making across departments.

When each department is operating in its own isolated environment, it is very difficult for managers to support each other in the achievement of their objectives or to avoid taking actions that can prevent their peers from succeeding. This can have a marked negative impact on overall member satisfaction in the credit union.

One of the biggest advantages the credit union has over other types of financial institutions is the member’s loyalty due in part to feelings that their credit union really knows them. However, this perception can be marred when a member is, for example, solicited for a new car loan after just financing a new vehicle with the institution.

But even worse is when a credit union member is showing every sign of looking for a new home and no one in the credit union notices or seems to care enough to proactively offer them home financing. In the case of home mortgage lending, it is surprisingly easy to render the home finance program ineffective simply by departments failing to share important member information the credit union already owns.

Connecting Teams to Improve Efficiency

While there are opportunities any time departments collaborate within a financial institution, certainly one of the most beneficial is connecting home finance to marketing. The benefits increase exponentially when automation is employed to pull information from the marketing department for use in the home and consumer lending departments without the need for human intervention.

Marketing is typically the department that owns the best data about prospects and existing members. This department is already aware of prospects available to the credit union. It can determine which members can be pre-approved for special offers. But that data should then be scrubbed by the other departments to determine whether the communication is actually right for that member.

The goal should always be to communicate the right message to the right member at the right time. If the various departments are connected electronically, this becomes much simpler.

Some institutions pay lip service to this concept by having department heads file monthly reports and then share this information between departments. This means executives are always operating in a dark period that stretches back as far as 30 days. They don’t really know what has been done with the member during that time. That’s not an effective way to operate and it will not lead to high levels of member satisfaction.

There are credit unions that are updating data between departments daily, sometimes hourly or even more frequently than that. When you consider that a mortgage loan offer will likely only be relevant for about 5% of a credit union’s membership, the more accurate the information the offer is based upon, the better.

But the right technology platform offers other advantages in addition to sharing data. With the right marketing automation, a partially completed application need never become a cold lead. When a member abandons an application before completing it, the system can alert the department for human follow-up or, even better, automatically generate a string of additional offers that will attract the prospective borrower back without requiring any human interaction at all. This type of automated workflow, powered by good information flowing in from multiple departments, can increase a credit union’s funded loan volume by 20% or more.

Rising Above the Silo

Many have pointed out the problems associated with departmental silos. Often, their proposed solution is to destroy the silo and reorganize the enterprise, but this rarely serves the company well. There are good business reasons for these management structures and they are not likely to disappear from the corporate landscape anytime soon.

In today’s financial services world, data need never be trapped within a silo and, once freed, can be used by the credit union to reach its objectives and deliver a much better member experience.

The marketing/CRM technology exists today and operates without requiring the credit union to change anything about the way it manages its people, structures its departments or runs its business – although once the institution taps into the full power of the information it already owns, some very positive changes will inevitably occur.

When marketing automation is built into the credit union’s loan origination system, it becomes more than a CRM. In the case of our Origence LOS, our integrated marketing automation platform also serves the credit union as a connected data warehouse that stores member data from all departments, keeping it synchronized and ready for use by any department, with full reporting and analytics capabilities.

The benefits of such a system are clear: It will reduce the expense of compiling and sharing data between departments (or the higher cost of not sharing data), but will also contribute to credit union growth and higher levels of member satisfaction. Credit unions are seeing their net promoter scores steadily rise because they have implemented marketing technology that helps them collaborate outside the silos in their institutions.

Credit unions that want to help more members meet their home finance needs will adopt technology that allows member data to flow easily between departments. As a result, they will tap into the mortgage loan marketplace and better serve their members.

Ken Burns EVP, Sales & Business Development Origence, a division of CU Direct Irvine, Calif.