2018 CUNA Excellence in Technology Award Alliant Credit Union: Consumer Loan Origination System (CLOS)

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1 2018 CUNA Excellence in Technology Award Alliant Credit Union: Consumer Loan Origination System (CLOS) In this digital era of member acquisition, lending and an engaged user experience, credit unions are recognizing the need to modernize and control the member experience through upgrades to their membership and lending platforms. We recognize applicants are shopping for financial products, so Alliant Credit Union has shifted our lending strategy to a product -first focus. With the delivery of our new Consumer Loan Origination System (CLOS) platform, applicants are first qualified for the lending product they are applying for and then a membership account is created. To remain competitive and achieve consistent revenue growth, a successful lending strategy must be aligned with a digital lending platform, which is built based on the latest technology development standards with a vison towards agile and open API standards. In October 2013, after a year of researching third-party lending platforms, Alliant began a journey to build a custom CLOS. The vision for the CLOS was to deliver a transformational digital lending solution for all consumer loan products (credit cards, new and used auto loans, new and used Tesla loans, home equity loans, RV loans and unsecured loans). At the time, not many credit unions had built their own lending solutions, and Alliant recognized the need for a custom lending platform to control the user experience, build the Alliant brand, modernize lending processes and drive Alliant s digital strategy. Alliant knew that building a lending solution in-house was not going to be easy. The current lending solution (DEAL) was fragmented, not scalable and dependent on a third-party decision engine being phased out and no longer supported by the vendor. The existing lending workflow was inefficient and limited Alliant s ability to enhance existing and introduce new lending products. Alliant assembled a team of business and technology decision-makers to brainstorm how to best tackle this challenge, including Alliant s Senior Vice President of Lending, VP of Consumer Lending, VP of Technology, and VP of Business Process Improvement. A cross-functional, interdisciplinary, dedicated Consumer Loan Origination team was formed with representation from the business, technology, and program management at all levels. The CLOS Program Team was tasked with the following high-level goals: Build a public-facing interface to allow members, as well as non-members, to apply for consumer loans Create a new loan application flow for Loan Consultants to assist applicants throughout the entire loan origination process Develop a workflow for underwriters to review and underwrite loan applications. Enable Closers to electronically distribute loan documents and fund approved loans Integrate with new third-party systems Develop an administration tool for internal users to review and manage loan applications. Build reporting services to assist internal users with tracking status and progress of loan applications, and to report on key performance indicators Build technical capabilities that can be leveraged across the enterprise A significant time commitment and investment was required to build a new generation lending platform without impacting current lending operations. Alliant partnered with a vendor to lead the CLOS program and build a team of technologists to deliver a modern user experience and back-end API services that achieved the objective of a flexible and scalable lending platform.

2 Business Program Management Technology The CLOS Program Management Approach The CLOS initiative adopted an iterative, collaborative, and holistic program management approach. The CLOS was built using a SCRUM agile framework. The dedicated CLOS team size reached a peak of 55, which included the Executive Sponsorship team, a Steering Committee, a TRIAD Team (Business Lead, Technology Lead and Program Lead), a Program Management team, Technical Business Analysts, Architects, Software Engineers, QA Engineers and training resources. CLOS Program Approach Operationalize Requirements Analysis Current State strengths & weaknesses Vision / Finalized Target State Definition Business Requirements Documentation Design Detailed Design Documentation Iterative Build Functionality Development Functionality Acquisition Measurements Definition Test Test Plan Collaborative Business Technology Deploy Training Plan Communications Plan Adoption Plan Measurements Activation People Process Holistic Product Technology Steering Committee TRIAD Team SMEs JAD Sessions Program Management The CLOS Requirements Gathering and Design Approach The future vision for the CLOS was to begin and end with experience design for loan applicants and Alliant employees. The CLOS design and development strategy began in a traditional manner with business requirements, JAD sessions and new-to-alliant Journey / Experience Mapping. This informed the high-level design artifacts (Lego Diagrams) depicting the building blocks for every consumer loan product. The high-level components and logical architecture were engineered with one of the main lending strategy goals in mind the ability to leverage CLOS capabilities across the enterprise. Below are samples of the requirements / design deliverables still is use today:

3 Experience / Journey Map High Level LEGO Diagrams Detailed Process Flows TFS Requirements Data Elements Spreadsheets The Technology and Development Approach A growing number of financial institutions are architecting and building intellectual web service APIs that can be used in future open banking Software-as-a-Service (SaaS) business models. Alliant had already adopted this model with the in-house developed new member application, online banking application, and mobile banking application. The CLOS was no exception. Alliant delivered on this objective with 14 reusable technology components, modern responsive user experiences for loan applicants from the Alliant public website, Alliant s online banking application, and internal employees, with a robust API catalogue consisting of 1.2 million lines of code. CLOS Reusable Technology Components 1. Identity Management Server 2. Users & Roles Management 3. Audit Logger 4. Workflow Engine 5. Configuration Management 6. Service Aggregator 7. Document Management 8. Disclosure Management 9. Content Management 10. Envelope Management 11. Errors & Warnings Management 12. Communication Management 13. Document Generation 14. Task Scheduler

4 The CLOS is an integrated ecosystem, including every channel, multiple third-party system interfaces, and the EBP, designed with technology features that enable key business objectives. Key Business Objectives User Experience Omni channel enablement Intuitive external facing UI Role-based internal consoles Rapid decisioning and funding Operations Process Increased automation and auto-decisioning Modular, scalable platform Product Management Efficient product introductions /modifications Real-time data and reporting Risk Management Effective credit risk management capabilities Robust live volume reports Ability to prudently sell deeper Product Process User Experience Technology Risk Mgmt. Decision Rules Engine, Queuing & Workflows, Document Management, 3 rd Party System Integrations, Audit Logging, Reporting, System Administration The CLOS was divided into manageable discrete components, each dealing with a key function in the loan origination lifecycle. Components of the CLOS

5 The CLOS includes a common look and feel external user interface design, integrating loan application information, tools, and third party systems. The CLOS incorporates a common look and feel internal console design, providing a one-stop shop experience for internal users, with access to loan application information, tools and third-party systems. The internal consoles can be customized by role (Loan Consultants, Processors, Underwriters, Closers, Fraud, Audit, etc.), and the console design includes a set of common tools available to all roles (Loan File History, Document Management, Communication, Notes, etc.)

6 For third-party system integrations, the CLOS architecture implemented common Service Agents, allowing the CLOS and other EBP components to consume third-party services in a uniform way. Service Agent Logical Architecture

7 Ancillary Benefits Alliant not only built state-of-the-art technology to enable the digital lending strategy, but also developed critical, lasting, transferable organizational capabilities, and the CLOS architecture permanently expanded and strengthened Alliant s technical aptitude.

8 The Results Alliant successfully launched the first set of loan products in the CLOS beginning in 2017, with the final loan product launched in April Total duration of this complex and transformational lending solution, from inception to completion, was 5 years in the making. As a digital-first credit union, Alliant has now delivered a business foundation and technology ecosystem where Aliant owns and controls the entire omni-channel member experience for acquisition, borrowing and self-service capabilities. In 2013, the Lending Division strategy consisted of the following statement:

9 Here are the actual results achieved through June 30, 2018: The Net Promoter Score (NPS) for members purchasing a loan product through the CLOS increased 22.5% to an NPS of Actual loan-to-share NPS is now Alliant s business and technology teams are now focused on countinous improvements of our CLOS platform with the expansion of its core components across other areas of the enterprise. Alliant s goal is to provide frequent updates that drive member engagement, position Alliant as a leader in delivering innovative solutions, and provide members consistently superior financial value while simplifying and enabling how people save, borrow and pay.