Artificial intelligence (AI) and machine learning (ML) are transforming indirect lending in a form of technology called document processing automation (DPA), according to Jay Carstens, SVP of client experience, and Sean Duffy, sales director. In a recent webinar, they shared how the latest technology advancements are improving the lending process with significant time savings.
The DPA advantage in indirect lending
DPA offers significant benefits to credit unions by automating the sorting, validation, and processing of loan documents. It enhances operational efficiency, improves compliance with lending regulations, and enables faster funding for dealers. Moreover, DPA provides superior experiences for credit union members and staff while increasing the capacity to handle higher loan volumes without additional strain on resources.
Tammie Atoigue, VP of consumer lending at Sound Credit Union (Sound), shares results from their DPA implementation. Processing time per loan was cut by 50%, enabling same-day funding and doubling their funding capacity. Staff morale improved as team members focused on higher-value tasks, including strengthening dealership relationships. In just ten weeks, Sound efficiently processed more than 2,000 loan applications, further demonstrating the impact of DPA on its operations.
Key features and benefits
- Intelligent document handling: DPA employs advanced algorithms to automatically parse and classify submitted documents. The solution offers flexible document organization to suit individual credit union preferences, ensuring that regardless of the submission type or origin state, all documents are consistently formatted and presented. This versatility eliminates the headaches associated with disorganized or improperly formatted documents, streamlining the entire process from submission to review.
- Data extraction and validation: One of the most powerful features of DPA is its ability to extract crucial data from submitted documents and generate comprehensive validation summary sheets. These summaries provide a quick reference guide for credit unions, highlighting missing documents, areas needing further attention, and completed requirements. This feature allows credit union staff to make fast, informed decisions without the time-consuming process of manually reviewing each document. Furthermore, DPA automatically evaluates the documents against the credit union’s established funding rules, flagging any discrepancies or failed business rules to ensure potential issues are addressed promptly.
- Seamless integration: DPA also offers seamless integration with existing dealer processes. Dealers can continue submitting deals as they always have, ensuring a hassle-free experience. This simplicity in adoption is crucial for both dealers and credit unions, as it eliminates the need for extensive training or workflow adjustments, making for a smooth experience.
- Standardized output: The final output delivered to the credit union includes not only the properly organized documents but also the detailed validation summary sheet. Documents are named, stacked, and grouped in the exact order preferred by the credit union, creating consistency for underwriting. This standardization significantly reduces the time spent on document organization and allows underwriters to focus on decision-making rather than administrative tasks.
Industry adoption and future directions
DPA adoption is accelerating across the industry, driven by its broad applicability and significant efficiency gains. As technology progresses, notable advancements are being made in fraud detection capabilities. As these improvements continue, DPA is expected to become an even more integral part of the indirect lending process.
DPA is not just improving loan validation; it’s reshaping the entire landscape of indirect lending. By offering faster turnaround times and more accurate processing, DPA provides credit unions with a competitive edge in member experience and operational efficiency. As this technology continues to evolve, it promises to unlock even greater potential for innovation in lending operations, positioning credit unions at the forefront of financial service delivery.
