Get Your New Loan Origination System Over the Finish Line

Sponsored by Origence

It happens at almost every credit union sooner or later—the board and management team realize that if the organization is to continue to grow, it must purchase a new loan origination system.

Picking the system is a time-intensive process, but even after the decision is made, the work is far from over. A successful implementation begins with the project team identifying needs and creating a detailed plan. The project manager must centralize information from the credit union’s 360-degree perspective. This means not just getting the lending team involved in the planning, but also people from marketing, IT, compliance, the call center, and the branch/operations departments. All key stakeholders need to be involved and aligned to get the implementation of a new LOS over the finish line.

We’ve outlined the essential checkpoints that credit unions should execute during the implementation process of their LOS.

1. Objectives, Transparency, and Alignment for your LOS

• Hold a kickoff meeting to make sure all objectives are aligned once the team is set. Typical objectives include: improving the member and staff experience; maximizing team efficiencies, such as workflows that simplify and organize work processes; increasing loan applications; and improving sustainability for loan growth. This means knowing the answer to the key question: why are we moving to a new platform? Often, not everyone has been part of the decision process, so it is essential to get buy-in from everyone on the credit union’s implementation team. Staff enthusiasm is critical. Explaining why the organization is making changes will minimize potential hurdles later on.
• The credit union must decide if it will roll out loans and new accounts at the same time. Often it is better, and easier on IT, to do one right after the other. Doing both at once can present additional stress points that could prolong the implementation process. At smaller credit unions, people wear multiple hats, and bottlenecks may be more likely.
• A valuable—if not vital—best practice is for the LOS provider to start by building the system for the client with a configuration made specifically for them. It is helpful to offer a platform that includes an online collaboration tool so everyone involved can clearly see the milestone dates and open issues. Open communication and transparency between vendor and client are key. Every person needs to know who is involved and that the timelines fit.
• After the various leads from different departments are identified, hold a kickoff meeting to ensure alignment of objectives, scope and milestones for the project. Third-party providers the credit union will use also need to be on board. Credit unions usually handle this step independently, but sometimes the LOS provider may need to assist. It is important to know if there will be any additional fees involved.

2. Testing and Bandwidth

Testing is a big step, and the credit union needs to take ownership of this part. In most cases, the provider will be able to offer some ideas as to what issues the credit union should be watching out for. Still, it will not be aware of every scenario the credit union may be encountering.

• For testing to be successful, the credit union needs to be aligned from a resource perspective. Testing often involves overtime hours, or it is done between the tasks involved in a staff member’s regular work. Either way, the credit union needs to ensure staff has time to focus on the task.
• A credit union best practice is to start testing earlier rather than later. An implementation generally will be more successful if the credit union simply gets started with something rather than holding meeting after meeting to try to make every decision upfront. The agile approach is to rely on proven templates, start with one aspect, and then do iterations going forward. Using this approach can help reduce system implementation time by as much as 50% (to 90 to 120 days from six months)
• User acceptance testing allows emulation of the entire application process, including underwriting, funding and document signing. The provider will set up the test environment for the credit union to try. An experienced provider who has gone through many installs should have templates that have proven successful in the past. As testing goes forward, the provider will be making adjustments for the credit union. There will be two-way sharing of information throughout the implementation process.

3. Rollout Speed and Strategy

The credit union will be using its existing system until the implementation date, so it is essential to know if the implementation will roll out fast or slow. This varies depending on the organization’s size and how well and quickly it adapts to change. Some credit unions choose to start with implementing the new LOS at just one branch, while others prefer to implement the LOS throughout the organization simultaneously. No one answer fits all scenarios.

• An experienced LOS provider will have FAQs and best practices based on previous client implementation experiences. These will ensure that your experience is on the surest path to completion.
• Sometimes, a provider will run into an issue caused by a workaround the credit union came up with based on the limitations of the previous LOS. This is why it is crucial to continue to hold regular meetings to ensure the new platform is set up in the best way.

4. Training and Ensuring Success

Usually, there is more than one way to accomplish a goal, so it is vital for an LOS vendor to be creative and open with its training. The staff at the credit union needs to understand the system to manage it after it goes live. A quality provider will teach the team the administration side, including how to build the system. This means going through the changes by having the lending staff do it, rather than doing it for them.

• When the bulk of the implementation is complete and it is time for internal training, a final best practice is to bring in a team of super-users. This team might include one person from each branch who has participated in training and is familiar with all the processes. This team of users will be very beneficial in ensuring a smooth, successful rollout of your LOS platform.
• Remember: Back in the contract phase, you don’t know what you don’t know. This is why it is important to have discovery discussions early on and for the provider to inform the credit union of the system’s capabilities. A high-quality platform has vital integrations that allow users to look at data from several systems at once, rather than having to log in separately. Some vendors have a box approach, and changes or additional services can bring up an extra fee. A good fintech will service the credit union and do what needs to be done.

As time-intensive picking your LOS is, taking the right steps during the implementation process will ensure that your system’s performance not only meets expectations, but delivers on your organization’s short- and long-term goals.

Monika Perkins is SVP/implementations and training, and Todd Bates is implementations manager at Origence, a CUES Supplier member. Discover how Origence can help you navigate the loan origination system experience.