Leveling the Playing Field for Credit Unions
Credit Union Times recently shared a story, “AI Helps Credit Unions Book More Loans”, about how Mirador uses machine learning and predictive analytics to help credit unions level the playing field against larger institutions in originating small business loans. Most credit unions don’t have the resources to compete with the big banks or fintech newcomers when it comes to creating a simple digital banking experience. Since credit unions are not-for-profit institutions, they generally have lower interest rates, better terms, and a local presence – just what a small business is looking for in a lender! Unfortunately, in order to offer these affordable services, many credit unions can’t invest heavily in upgrading their digital features.
While an affordable loan with good terms is something most small businesses prefer, they are also often competing against time. In some cases, if it takes too long to get a loan, they may even go out of business. That’s where the traditional credit union falls short. Without a truly integrated digital loan application system, the process can span weeks and even months. All the manual labor and time involved is also expensive for credit unions. This decreases the potential profit on each loan. That’s why many small businesses turn to alternative online lenders that can get the money fast, but it comes at a price. These types of loans often have egregious rates and confusing terms.
Mirador’s white-labeled digital solution bridges this gap for credit unions. They can offer their traditionally affordable small business loans, but much faster. Trevor Dryer, Mirador’s CEO and Co-Founder, explained the three main areas Mirador can help credit unions in the Credit Union Times article:
“First, it helps them acquire new borrowers. He explained credit unions implementing Mirador saw a 30% to 40% increase in the number of applications from their small business members. The second area Mirador helps credit unions are in creating a delightful digital loan origination experience in a branch, online and mobile, Dryer noted. The third area is in the back-office, where Mirador helps originate the loans more efficiently and offers a better risk understanding (if financial institutions employ the Mirador risk-model). This allows them to provide financing more profitably. ‘At the end of the day, the credit decision ultimately rests with the credit union. We can provide tools that use artificial intelligence and machine learning to help them in those decisions.’”
This is a game changer for credit unions and an opportunity for them to provide the bells and whistles of a large bank at a very low cost. What is more, Mirador can more than double a borrower’s chance of getting a loan. That means more businesses can get the capital they need to create jobs, purchase inventory, expand, or consolidate debt. While there is much hype about how traditional financial institutions won’t be able to survive the digital revolution, the truth is many are stepping up their game. If not on their own, with critical fintech partnerships with companies like Mirador.