E-Signatures Streamline Loan Process
Manually packaging loans is a labor-intensive process for any financial institution. Considerable time is spent sending loan documents to members via snail mail and waiting for the signed documents to be returned.
Often the process is stalled and repeated when borrowers inadvertently miss a signature or forget an initial on a loan document. “You just hope they signed everything where they were supposed to,” says Cassie Mangold, director of consumer lending for $910 million asset TTCU (formerly Tulsa Teachers Credit Union), Tulsa, Okla. “If one document comes back without a signature, you’re stuck. You’ve got to send it back again.”
To streamline the lending process, TTCU turned to an electronic signature service from Seattle-based DocuSign. Mangold explains how this has worked.
CU Mag: What effect has the e-signature capability had on your loan processing?
Mangold: Since deploying DocuSign’s e- signature service, we’ve reduced our loan processing cycle from one week to less than one day. It worked so well that we integrated it in to our new loan-by-phone call center to increase employee productivity and enhance member service.
By automating this process, the loan call center has become the dominant user of DocuSign because of ease of use and sheer volume of signature and vehicle loans.
CU Mag: How did TTCU get members’ buy in for e-signatures?
Mangold: First, we had to be sure we selected the best e-signature solution: one that was easy to use and provided a positive end-user experience.
We initially sent 15 test DocuSign envelopes to our company executives and branch managers to get their feedback on the experience. The internal test run was well received, so that gave us confidence to begin rolling it out across our loan processing business.
We did a staged rollout in our lending groups, starting with the main branch lending staff in May 2008. Once we successfully sent envelopes from our main branch group and worked out the procedures, we were able to quickly roll out the platform.
Our staff completed a training session to make sure they understood how the service worked.
When members call about securing a signature or vehicle loan, we let them know we can do the entire process online and they don’t have to take time out of their workday to visit us during office hours or wait for us to mail them the information.
We e-mail the loan documents when they are on the phone with us. Once they receive the e-mail, they’re able to access the online forms and we can walk them through the process.
Members have been very enthusiastic about it and find it very simple. Within minutes they can adopt an e-signature, fill in the form, and electronically sign.
Most members—when given the choice between completing their loan documents online or waiting for us to mail them a loan package—jump on the chance to get it done on the spot, online.
The final stage was integrating [e-signatures] with our loan-by-phone call center, which was completed in February 2009. Since implementing DocuSign in our loan call center, it has become the dominant users due to ease of use, types of loans, and volume.
CU Mag: How much does it cost to implement e-signatures?
Mangold: TTCU incurred significant costs and expended considerable resources printing, mailing, and waiting for loan documents to be returned. Plus, the lag in transacting loans had a financial impact to the credit union’s revenue stream.
DocuSign has eliminated much of the time and costs involved in the traditional process of transacting loans. This has positively influenced our revenue stream.
To date, TTCU has reduced the costs of administering loans and increased revenues. This is evident through 10% of our loans being processed three to five days faster using DocuSign, which is a considerable savings.
CU Mag: How does this help the CU be more efficient?
Mangold: Automating the lending process helps us on both ends of the transaction.
First, we can get loan documents to members located anywhere in the world faster because we don’t have to print or fax documents; we just submit directly from our computer. Second, members return the completed loan contract to us much faster.
We’ve also reduced our “not in good order” rates. Before we started using DocuSign, if a contract was missing a signature, we had to send it back to the member and wait for it to be returned to us.
The DocuSign service won’t allow members to complete the transaction without all the fields completed, and it even guides the user where to sign—which prevents mistakes from being made.
Finally, by shortening the lending cycle, we can now get the loan on the books in less than a day rather than five to seven days. This means, as an organization, we have more cash at our disposal that we can pump back to the benefit of our members. Most importantly, a faster cycle means we can fund our members faster, when they need it most.
Many of our members are military or college professors who live outside of the country. DocuSign offers a better, faster and easier way to service them. In the end, the key to our success is servicing our members.