Credit unions are leveraging artificial intelligence to identify loan opportunities that might otherwise be missed, resulting in increased volume, better loans, and improved member satisfaction. One credit union leading the way is Nebraska-based Centris Federal Credit Union, with $1.3 billion in assets and more than 135,000 members.
Centris Federal Credit Union implemented AI-loan underwriting in 2024 to automate and expand their loan approvals. Through their relationship with their LOS provider, they integrated and implemented AI, which uses more data and better math to identify loan candidates that might not otherwise be considered due to thin credit files and/or insufficient information to establish a traditional credit score. Centris Federal Credit Union found this technology to be a comprehensive and efficient underwriting solution that reduces potential human bias while increasing member approvals and holding risk constant.
Benefits and efficiencies of AI underwriting
Auto dealers and indirect lenders highly value fast approvals, as delays can deter buyers and impact a dealer’s bottom line. Automated loan decisions help solve these problems, creating multiple efficiencies and benefits for the credit union’s lending efforts.
Consumers expect immediate results, influenced by their retail experiences, where a few clicks lead to next-day or even same-day delivery. With this standard already deeply ingrained into buyer expectations, loan approvals must evolve. A growing number of credit unions have already deployed technology that provides an immediate response to member inquiries, allowing them to keep members from going elsewhere for quick answers.
Automation creates efficiency and better service delivery. At Centris Federal Credit Union, AI technology has quickly grown automated loan decisions from 43% to 63%, even though overall credit quality experienced challenges. “Basically, during a time when consumers are coping with inflation, we’ve stayed the course and helped more members with their vehicle financing needs,” said Rick Seamann, vice president of indirect lending at Centris Federal Credit Union.
The ease, convenience, and speed of AI-driven lending decisions satisfy buyers' instant gratification expectations, allowing for a better overall buyer experience. Quicker responses also create a more satisfied dealer, improving the lender-dealer relationship and often leading to more deals.
The impact
“Getting a credit decision to the dealer quicker makes it a win-win-win for the credit union, the dealer, and the member,” Seamann said.
Centris Federal Credit Union credits their loan origination system with more than 30% growth in the credit union’s indirect lending volume. Seamann also credits being one of the first to market with an AI-driven system decision as a differentiator that attracts new auto loan referral sources for their organization.
A big jump in lending volume is great news for Centris, but it doesn’t tell the whole story. The credit union reviewed data before, during, and after the implementation of AI technology and found that the credit quality of loans approved by the AI model may be more reliable than the loans approved by their traditional credit scoring models.
The power of AI technology is evident in its ability to originate more loans faster and with fewer mistakes. By using AI technology, credit unions can focus resources on members who need extra consideration, giving the financial institution the ability to grow smarter, not just bigger.
Increasing quality loan volume is a key objective for everyone. However, the value of an instant decision is significantly reduced if it results in bad decisioning. AI-driven lending is not a set-it-and-forget-it proposition. It requires thoughtful rule-building, attention to detail, review for compliance, ongoing quality control monitoring, and strategic planning. Nonetheless, time and data have demonstrated that the performance of loans approved by AI-developed models can surpass that of traditional credit scoring models.
The strategic advantages of AI-driven underwriting
Centris Federal Credit Union has not only streamlined the loan approval process but also enhanced member satisfaction. By leveraging advanced technology available through partnerships like Origence and Zest AI, Centris Federal Credit Union has demonstrated the power of efficiency, enabling them to grow smarter and more effectively to meet the needs of their members. This strategic adoption of Zest AI technology underscores the importance of innovation in maintaining a competitive edge and delivering superior service.
