Consumer lending survey: Credit unions that use automated loan decisioning practices drive higher loan growth, run more efficiently

WASHINGTON, DC (December 1, 2016) — Callahan & Associates surveyed 333 credit unions regarding automated decisioning practices in their consumer loan portfolios and the impact on growth and efficiency trends. Of all credit unions surveyed, 63.66 percent actively use automated decisioning in their consumer loan practices.

Liz Furman, an industry analyst at Callahan & Associates, noted, “Some credit unions worry their delinquency will be negatively impacted by implementing consumer automated decisioning; however, this survey found that the median consumer delinquency rate was actually lower at credit unions with a consumer LOS, at 49 basis points, than 55 basis points, the median consumer delinquency ratio of those credit unions that do not use automated decisioning.”

Respondents using automated decisioning technology have a median efficiency ratio of 79 percent, five percentage points lower than those that do not. However, the median efficiency ratio for credit unions with less than $100 million in assets is 4 percentage points higher for institutions that use consumer automated decisioning. It’s an indication that executives at smaller credit unions are perhaps accepting the upfront costs of implementation with the expectation of future growth and efficiency.

Credit unions respondents that use auto decisioning for consumer loans have higher rates of five-year consumer loan origination compounded annual growth rates (CAGR). The median for those that auto decision is 13 percent. That’s 5 percentage points higher than the 8 percent CAGR for those that do not.

The median loan-to-share ratio for credit unions that report using automated decisioning is 81 percent. That’s higher than 73 percent, the median loan-to-share ratio for credit union respondents that do not use automated decisioning.

Average member relationship correlates positively with consumer loan origination systems. The median average member relationship for credit union respondents that auto decision is $16,971, with half of the results between $14,329 and $20,474. Comparatively, credit union respondents that do not use automated decisioning have a median average member relationship of $13,318, with half of the results between $10,861 and $15,937.

The survey also looks at how credit unions evaluate their consumer decisioning criteria, what percent of loans are auto approved or denied compared with manually decisions, and which technology provider has the greatest market share. For access to the full interactive report contact Victoria Taylor at or 202.223.3920.

About Callahan & Associates

For more than 35 years, Callahan & Associates has helped credit union leaders identify strategic growth opportunities that increase member value. We create meaningful dialogue, connect people, provide counsel, and help organizations thrive through our competitive analytics, best-practice media, leadership consulting, and collaborative ventures. Our clients grow assets, members, shares, and loans faster than industry averages. Learn more at


Victoria Taylor

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