8 FOCUSREPORT/CUSOsFor most credit unions, mortgage lending is only one product in a full menu of financialservices offerings. Unfortunately,due to the complexity of mortgagelending and the significant regulatory oversight that comes withit, home finance typically requiresits own department, despite thefact that it may not account for amajor portion of the institution’sannual revenue in comparison toother products.
Departmentalizing home finance makes regulatory compliance and delivering a high-qualitymember experience attainable,but at a price. Part of the priceis paid in additional overhead,including salaries and facility-related expenses. But when themortgage department is placed inits own silo, the cost also includeslost efficiencies and missed opportunities. The negative impactbusiness silos have on marketingautomation is perhaps the highestcost the enterprise pays.
Marketing Automation’sPromise for the Credit Union
The success of any enterprise depends upon its ability to consistently brand itself in the mindsof its prospects, demonstrate thevalue of its offerings, and remaintop of mind for when the prospectis ready to buy.
Marketing automation involves using software tools toincrease the productivity of marketing programs. It offers manyadvantages to credit unions thatare pursuing growth and seek todeepen relationships with theirmembers. Banking relationshipsare not simple, and neither is theconsumer’s approach to financialproducts and services, many ofwhich they may find difficult tofully understand.
Marketing automation is par-
ticularly effective here as it in-
creases sales and maximizes ef-
ficiency for firms with complex
sales cycles, allowing marketing
and sales departments to man-
age all prospect interactions and
to create, deploy and optimize
online marketing campaigns from
a central platform.
Not every company
that attempts to capi-
talize on market-
ing automation fully
understands how to
make it effective.
In a survey con-
ducted by Regalix, a
firm, senior market-
ing executives were
asked about the key
benefits they received
from marketing auto-
mation. They found it
increased lead generation (84%),
provided better prospect/lead in-
sight (73%), increased efficiency
(73%), enhanced lead scoring and
nurturing (71%) and improved
lead quality (69%).
But when member informationis bottled up in a silo, it costs theentire institution. Fortunately,there are solutions to this problemthat don’t involve changing theway the enterprise is structured ormanaged.
The Preponderance of theBusiness Management Silo
In an article written in 2012, FastCompany urged readers to “smashtheir silos” in order to build theirbusinesses, but not before firstpointing out that there are goodreasons these management structures exist.
“(Silos) provide the structure
that allows companies to work,” it
stated. “In companies, silos tend
to be places where information,
focus (another word for choosing
priorities) and control flow up and
Traditional management struc-
tures encourage business silos.
When efficiency is the goal, this
type of chain of command has
been a powerful tool used by
leaders throughout history. But in
our modern world, it also leads to
some serious problems.
Some of the problems associated with business silos are nonaligned priorities, poor or nonexistent information flow and lackof coordinated business decision-making across departments.
When each department is operating inits own isolated environment, it is verydifficult for managersto support each otherin the achievement oftheir objectives or toavoid taking actionsthat can prevent theirpeers from succeeding. This can have amarked negative impact on overall member satisfaction in thecredit union.
One of the biggestadvantages the credit union hasover other types of financial institutions is the member’s loyaltydue in part to feelings that theircredit union really knows them.However, this perception can bemarred when a member is, for example, solicited for a new car loanafter just financing a new vehiclewith the institution.
But even worse is when a creditunion member is showing everysign of looking for a new homeand no one in the credit unionnotices or seems to care enoughto proactively offer them homefinancing. In the case of homemortgage lending, it is surprisingly easy to render the home finance program ineffective simplyby departments failing to shareimportant member informationthe credit union already owns.
Connecting Teams toImprove Efficiency
While there are opportunities anytime departments collaboratewithin a financial institution, certainly one of the most beneficialis connecting home finance tomarketing. The benefits increaseexponentially when automationis employed to pull informationfrom the marketing departmentfor use in the home and consumerlending departments without theneed for human intervention.
Marketing is typically the de-
partment that owns the best data
about prospects and existing
members. This department is al-
ready aware of prospects avail-
able to the credit union. It can
determine which members can
be pre-approved for special of-
fers. But that data should then
be scrubbed by the other depart-
ments to determine whether the
communication is actually right
for that member.
The goal should always be tocommunicate the right messageto the right member at the righttime. If the various departmentsare connected electronically, thisbecomes much simpler.
Some institutions pay lip service to this concept by havingdepartment heads file monthlyreports and then share this information between departments.This means executives are alwaysoperating in a dark period thatstretches back as far as 30 days.They don’t really know what hasbeen done with the member during that time. That’s not an effective way to operate and it will notlead to high levels of membersatisfaction.
There are credit unions that areupdating data between departments daily, sometimes hourly oreven more frequently than that.When you consider that a mortgage loan offer will likely only berelevant for about 5% of a creditunion’s membership, the moreaccurate the information the offeris based upon, the better.
But the right technology platform offers other advantages inaddition to sharing data. Withthe right marketing automation,a partially completed applicationneed never become a cold lead.When a member abandons an application before completing it, thesystem can alert the departmentfor human follow-up or, evenbetter, automatically generate astring of additional offers that willattract the prospective borrowerback without requiring any human interaction at all. This typeof automated workflow, poweredby good information flowing infrom multiple departments, canincrease a credit union’s fundedloan volume by 20% or more.
Rising Above the Silo
Many have pointed out the prob-
lems associated with departmen-
tal silos. Often, their proposed
solution is to destroy the silo and
reorganize the enterprise, but this
rarely serves the company well.
There are good business reasons
for these management structures
and they are not likely to disap-
pear from the corporate land-
scape anytime soon.
In today’s financial servicesworld, data need never be trappedwithin a silo and, once freed, canbe used by the credit union toreach its objectives and deliver amuch better member experience.
The marketing/CRM technology exists today and operateswithout requiring the credit unionto change anything about the wayit manages its people, structuresits departments or runs its business – although once the institution taps into the full power of theinformation it already owns, somevery positive changes will inevitably occur.
When marketing automation isbuilt into the credit union’s loanorigination system, it becomesmore than a CRM. In the case ofour Origence LOS, our integratedmarketing automation platformalso serves the credit union as aconnected data warehouse thatstores member data from all departments, keeping it synchronized and ready for use by any department, with full reporting andanalytics capabilities.
The benefits of such a systemare clear: It will reduce the expense of compiling and sharingdata between departments (or thehigher cost of not sharing data),but will also contribute to creditunion growth and higher levelsof member satisfaction. Creditunions are seeing their net promoter scores steadily rise becausethey have implemented marketing technology that helps themcollaborate outside the silos intheir institutions.
Credit unions that want to helpmore members meet their homefinance needs will adopt technology that allows member data toflow easily between departments.As a result, they will tap into themortgage loan marketplace andbetter serve their members. n
Connect Departments for Efficient Mortgage Operations
Ken BurnsEVP, Sales & BusinessDevelopmentOrigence, a divisionof CU DirectIrvine, Calif.