What’s AI got to do with it?

The strategic impact of AI in indirect lending

The auto buying experience has certainly changed over the years. Remember when we received credit applications over fax machines, and a quick credit decision was a few hours or even a few days? Overnight funding packages were the norm, and paper checks exchanged hands. You can likely remember the sounds of the fax machine right now.

Technology has come a long way, and it continues to change our workflows and add efficiencies that we never expected. Credit unions are at the center of this shift as they find ways to embrace lending solutions powered by artificial intelligence (AI).

At the forefront of this is Document Processing Automation (DPA), a new tool leveraging AI and machine learning to radically streamline credit union lending operations. Its added benefits are bringing lending workflows into the next generation of financial technology, offering much-needed efficiency.

The AI efficiency advantage

This is the time of virtual shopping, digital purchases, and self-driving cars. Buyers expect immediate responses with short wait times, and that includes financing.

In the quest for operational efficiency, credit unions are turning to AI as a strategic ally. Believe it or not, traditional manual processes still sit in prolonged loan origination timelines, causing frustration among members expecting swift decisions. DPA eliminates this friction by automating the classification, analysis, and extraction of data from the vast number of loan documents, ranging from pay stubs and W-2s to financial records and insurance policies.

The accelerated loan processing capabilities of DPA translate into a substantial reduction of processing time. What used to take days can now be accomplished in a fraction of that time, meeting member expectations promptly and reinforcing credit unions’ commitment to exceptional service. This streamlined approach enhances efficiency and positions credit unions as responsive and member-focused.

Optimizing operational efficiency for sustainable growth

Operational efficiency is the cornerstone of a successful lending program. DPA not only streamlines day-to-day operations but also offers the adaptability to seamlessly manage volume peaks from dealers. The technology’s ability to manage increased volumes without a proportional increase in overhead costs positions credit unions for sustainable growth. Any time we can find ways to do more with less is a win for the credit union.

Beyond optimizing resource allocation, DPA minimizes the need for manual document sorting and categorization. This automation allows credit union staff to redirect their focus from routine tasks to higher-value activities, such as personally answering questions of members or dealership staff to build long-lasting relationships and ensure the best experience. By automating time-consuming processes, credit unions can manage more loan applications while maintaining quality, reducing operational costs, and improving overall efficiency.

Automating decisioning

Precision in decision-making is fundamental in lending, yet manual processes also exist here. Traditional manual processes are susceptible to human errors and inconsistencies, potentially leading to financial losses and member dissatisfaction. By deploying DPA’s AI algorithms that adhere to predefined rules and guidelines, workflows naturally see an improved consistent process, reducing human error.

For example, DPA cross-references various documents such as check stubs and W-2s and ensures the calculated income aligns seamlessly with the information provided on the loan application. This minimizes errors in the stare and compare process and enhances the lending process’s overall efficiency.

Strengthening dealer relations through efficient funding processes

A healthy relationship between credit unions and dealerships is pivotal for the success of auto lending programs. DPA strengthens these relationships by expediting the loan funding processes. Reduced contract-in-transit (CIT) time decreases holding costs for dealerships and improves their cash flow, positively impacting employee incentives.

For credit unions, this streamlined funding process translates into enhanced dealer relations. Dealerships experiencing the benefits of swift and efficient funding are more likely to choose the credit union as their preferred lending partner. This relationship provides credit unions with increased leverage, enabling them to negotiate improved portfolio mixes and more competitive terms for their members.

A member-first approach to indirect lending

Credit unions have long prided themselves on providing great member service. DPA amplifies this commitment by enabling credit unions to serve their members with unparalleled efficiency. Members benefit from a lending process that is not only faster but also frees up credit union staff to provide personal service, resulting in a seamless and convenient experience.

Member satisfaction from a streamlined and personal lending process contributes to loyalty and positive word-of-mouth marketing. Satisfied members are more likely to remain loyal and recommend the credit union to friends and family, creating a ripple effect that can significantly contribute to increased membership and loan volume.

Charting the future: DPA as a strategic imperative

As credit unions navigate the evolving auto financing industry, those equipped with DPA capabilities are strategically positioned to lead the way. DPA transcends being a mere tool; it emerges as a strategic imperative that paves the way for a future characterized by efficiency and a heightened focus on member needs.

Learn more about DPA and how it can transform your indirect lending business by contacting us for a demo.


David Adams is the Senior Vice President of Lender Client Experience at Origence. In this role, Dave supports our nationwide team of talented Client Experience Directors and Operations Managers who serve our credit union partners. Dave also helps facilitate the voice of the customer to our product, development, and support teams. Dave has been with Origence and the credit union industry for more than 20 years.