Pacific Service Credit Union operates in a highly competitive market, with an extremely tech-savvy membership. Using technology in a very strategic manner – while maintaining a human touch – is vital for the credit union to deliver a memorable member experience.
To deliver on their tech-forward strategy, the $1.4 billion credit union, located in Northern California, implemented the Origence arc OS loan origination system (previously Lending 360). Within two years, they could receive automated approvals on 30 percent of applications. That figure has since increased to 40 percent. The credit union also added the platform’s account origination system, and the management team continues celebrating the decision to switch to the LOS from its previous platform.
Today, senior vice president and CLO Hemlata Patel, along with retiring senior vice president Chris Oldag, praise Origence arc OS and what it has helped the credit union accomplish.
The credit union’s secret sauce
“We are facing unequaled competition from fintech solutions that are faceless, voiceless, and do not make judgmental credit decisions,” Patel explained. “You cannot reach a live person that makes decisions or exceptions in that world, but you can at your credit union. This is our secret sauce, and we excel at delivering unbeatable service.”
Patel commented that the credit union is able to meet the demands of its members in part because arc OS is both flexible and robust, providing an API interface that supports mobile and digital solutions, as well as quick decisioning.
Oldag noted that it’s important to be able to leverage technology to reduce friction on the easy deals while freeing up the lending team to make the best decisions when the applicant does not click all of the buttons necessary to earn an instant approval.
When asked for the key to Pacific Service’s winning LOS strategy/solution, Oldag cited a combination of flexibility to handle every consumer loan product the credit union offers and the ease of training and implementation. Additionally, having a LOS that can adapt to new services, features, and products has been critical to the credit union’s growth and success.
The credit union says the reliability of arc OS has been exceptional. In particular, the responsiveness to keystrokes and data entry is immediate, compared to the lag the credit union often experienced with their previous system. All of which allows the lending team to move loans along quickly. Origence arc OS allows Pacific Service’s lending team to work more efficiently and improve their experience.
“It has exceeded all of our short- and long-term goals,” Oldag assessed. “In addition to its low cost and flexibility, we have had a great, and I mean great, support team. They have been very responsive to our needs, providing a high level of service, and we have experienced almost no downtime.”
“Working with the Origence team to advance our lending technology and practices has been a truly exceptional experience,” Patel added. “They’ve helped us drive up system approvals on all product lines, and they were able to see places where we were incongruent from product to product that we didn’t see on our own.”
Immediately after the implementation of arc OS, the lending team at Pacific Service noticed several improvements. They were able to rely on the reporting and measurements in the template database to smooth month-end summaries, and the credit union’s loan production friction dropped significantly compared to its prior LOS.
Loan growth and efficiencies shine
In its first year using Origence arc OS, Pacific Service grew its consumer loan portfolio from $253 million to $401 million, representing a remarkable 58.5 percent net growth. The credit union continues to process all its consumer loans on the LOS, including direct and indirect auto loans, credit cards, second mortgage/home equity loans and credit lines, motorcycle/RV/boat loans, and unsecured loans.
As of year-end 2021, the credit union reported just 0.04 percent delinquencies and has averaged approximately 0.23 percent charge-offs since implementing the LOS. In the first half of 2022, Patel reported that growth continues to be nothing short of very good! “We are at 7.1 percent net loan growth with no mortgage balance increase year to date,” she said.
The underwriting efficiencies provided by arc OS have allowed Pacific Service to spend more time improving the quality of indirect deals and closely tracking loan performance. This efficiency has allowed them to start an outbound call program without adding additional staff. The credit union uses the system’s online and mobile loan application tool to help meet member expectations and drive a better overall lending experience. Currently, Pacific Service receives 60 percent of its applications through those digital channels.
“The value for the price is incredible,” Oldag enthused. “The ROI with arc OS has been truly exceptional. The LOS is easy and flexible, and we can train new users in almost no time thanks to its intuitive, simple functionality.”
A world-class member experience
Patel and Oldag noted the hours of downtime each week with its prior LOS, but the credit union has had very few interruptions with arc OS. Among the other improvements using arc OS, Oldag said the credit union’s risk management process eased significantly. The lending team is able to easily load pre-screened pre-approvals each quarter, and management has instant access to metrics on production by individual to product types in moments.
“Best of all, we are able to deliver world-class service experiences to members instantaneously on the pre-approvals,” said Patel. “This is important because roughly 35 percent of our members are pre-screen pre-approved, meaning no friction at car dealerships. Those members who apply online get immediate decisions, and those who speak to our reps get speedy and outstanding service as well. Bottom line, it is a high performance, easy-to-use LOS that gives members the experience they expect from us.”
Overall, five years of experience using Origence arc OS can be described as expectations being met and surpassed, with Pacific Service being well positioned now and in the future, to continue its extraordinary lending success. Serving a highly tech-savvy membership with 40 percent automated approvals, Pacific Service is leading the technology charge and delivering a great lending experience to its members.
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