Podcast Feature

Removing Friction from the Lending Experience

This episode of the Banking Transformed Podcast is sponsored by MeridianLink®.

MeridianLink (NYSE: MLNK) empowers financial institutions and consumer reporting agencies to drive efficient growth. MeridianLink’s cloud-based digital lending, account opening, background screening, and data verification solutions leverage shared intelligence from a unified data platform, MeridianLink® One, to enable customers of all sizes to identify growth opportunities, effectively scale up, and support compliance efforts, all while powering an enhanced experience for staff and consumers alike.


Jim Marous (00:09):

Welcome to a special eight-part series of the Banking Transformed Podcast recorded at MeridianLink Live in Nashville, Tennessee. I’m your host, Jim Marous.

Jim Marous (00:18):

During this series of episodes, we dive deep into the world of digital transformation in the financial services industry.

Jim Marous (00:24):

We speak with executives from a diverse range of financial institutions, each of whom has embarked on a unique digital transformation journey to become more future ready and responsive to the changing needs of customers.

Jim Marous (00:37):

We explore the strategies, challenges, and lessons learned by these forward-thinking organizations as they navigate the complex landscape of digital transformation.

Jim Marous (00:47):

Whether you’re a financial services professional, a FinTech entrepreneur, or simply interested in the future of banking, this series provides you with valuable insights and inspiration as we explore the cutting edge of digital transformation in the banking industry.

Jim Marous (01:04):

We hope you enjoy these candid conversations with organizations of all sizes.

Jim Marous (01:11):

Hi, Jim Marous from Banking Transformed, today doing our podcast from MeridianLink Live in Nashville, Tennessee at the Gaylord Hotel.

Jim Marous (01:18):

What this event is, is about 1,700 financial institutions trying to get better ideas on how they can transform their organization with technology, good culture fit, and working with each other and hearing from others in the same role.

Jim Marous (01:35):

So, we have today, Tim Wheeler from Fortera Credit Union. Tim, can you tell us a little bit about yourself, your career, and also, a little bit about Fortera Credit Union?

Tim Wheeler (01:45):

Yeah, absolutely. I’m Tim Wheeler, as you mentioned, I’m the chief lending officer with Fortera. I’ve been with Fortera now, for 21 years.

Tim Wheeler (01:53):

Started my journey in consumer lending. Prior to joining Fortera, I actually started my career in banking in subprime finance before finding the miracle of credit union life and what it is. It’s been an incredible journey over my 21 years.

Tim Wheeler (02:12):

Began in consumer lending with a goal of helping to enhance member experiences through efficiency and through additional automation, which ultimately, led forward to our journey with MeridianLink and building out a digital first experience.

Tim Wheeler (02:27):

Our CEO and myself knew when we wanted to go with MeridianLink, we wanted to create the best, most efficient member experience we could and eliminate the pain points that prevent borrowers from moving forward with lending transaction.

Tim Wheeler (02:44):

And I really feel like we’ve done a really good job of getting there, but we still have miles to go before we sleep. There’s new technology, there’s new enhancements to both MeridianLink and within partners in the industry to help move us even more forward than we are today.

Jim Marous (03:00):

So, it’s interesting because you’ve mentioned so many things, that little nugget there. Number one, you sought out technology very early.

Jim Marous (03:11):

I mean, you were an event last night sponsored by MeridianLink and you knew not everybody was at the same place in the journey. We know that overall, but the reality is to make that digitalization decision, it’s not an easy one for many reasons.

Jim Marous (03:26):

Number one, the people internally have to realize they’re going to be disrupted if no other reason, by the way they do their job. Number two, that you said seven years ago, you started with MeridianLink?

Tim Wheeler (03:38):

Four years ago.

Jim Marous (03:39):

Okay. Four years ago. Even then, MeridianLink and still today, is transforming from their perspective, how they make that whole process better. And you are jumping on a train that’s already moving, but they’re not stopping thinking.

Jim Marous (03:53):

So, you made the decision to go with an organization that’s really focused on that part of the journey, especially on the lending side, which is their legacy. And so, you’re trying to catch up at the same time knowing, oh, by the way, this isn’t going to change.

Jim Marous (04:07):

So, in your process of digitalizing your back-office journey, what was the biggest challenge you faced?

Tim Wheeler (04:15):

I think the biggest challenge was again eliminating those barriers and eliminating those pain points that prevent-

Jim Marous (04:24):

Such as what?

Tim Wheeler (04:26):

For example, we took a detailed look of automating member follow up and automating what’s required of the member to continue with the loan. Is it always a thing where you need proof of income, you need statements, you need certain things. Those don’t necessarily impact the lending decision.

Tim Wheeler (04:50):

And while in some cases it may be needed, but why are we making that the rule for all? So, let’s eliminate those pain points to get the borrower through faster.

Tim Wheeler (05:00):

Because I think borrowers today, they want to see a digital experience and they want to do their lending transactions today, especially more than even 12, 24 months ago. They want to manage that whole experience from their device of choice.

Tim Wheeler (05:19):

They don’t want to have to necessarily come into a branch. They don’t want to-

Jim Marous (05:25):

They may want the option to do so, but it’s not-

Tim Wheeler (05:26):

They Want the option, but it’s not their choice.

Jim Marous (05:28):

When they’re on a mobile device, they’re not thinking, “By the way, this is going to end up in the branch.”

Tim Wheeler (05:33):

Right. And they also, don’t necessarily want to follow up phone call. They just want the system to prompt them and say, “These are the next steps. This is what you do next. This is how you move forward to funding. And by the way, if you need help, here’s how you reach us. Here’s how you contact us.”

Tim Wheeler (05:50):

One of the new things we’re working on now, is we’re working on deploying chatbots so they can have their bot-

Jim Marous (05:57):

Assistance along the way.

Tim Wheeler (05:58):

… within MeridianLink, and they can help them along the way without, again, having that direct interaction, whether it’s face-to-face, over the phone, or email.

Jim Marous (06:05):

So, you do that just on the lending side or you do it on deposit side also?

Tim Wheeler (06:08):

Deposit side also. It’ll be for both. Well, we’ve had MeridianLink account opening since when we launched lending as well, but we recently launched MeridianLink combo apps to make that more of a seamless experience that way, A.

Jim Marous (06:27):

You’re making the thing even faster that way.

Tim Wheeler (06:29):

Yes. That way we-

Jim Marous (06:29):

But it’s also, intuitively, both digitally and in person making it so I’m not trying to open an account. I’m trying to build a relationship. Which is so difficult in digital, because if you’re in front of me, you’re probably not going to get up out of the desk during the process of us talking.

Jim Marous (06:47):

On the other hand, person can pick up the phone and go, “Nah, thanks, but not going to go forward.” So, we find cross selling and relationship enhancement to be more difficult than ever because it’s different. We haven’t done it really well.

Jim Marous (07:01):

So, the combo app, the platform you’re looking at now, is actually bring these two things together with the same intent. Which is remove friction, simplify the process, make it somewhat intuitive, and eliminate all those things that were built in a legacy mindset that in a digital world can be answered differently.

Jim Marous (07:22):

We find you heard me last night, say everybody has this goal, this holy grail of, I want to hit that three to five minute in deposits. Maybe five to seven in lending. It varies, but most are at 15, 20 minutes, or a couple days. Where are you as an organization today?

Tim Wheeler (07:42):

We have most of our fundings on the lending side in one day. We do an outstanding job.

Jim Marous (07:50):

How long is the application?

Tim Wheeler (07:51):

Oh, the application itself? I’d say we’re probably in that five-minute range on the loan side. And I think on the account opening side, probably even less.

Jim Marous (08:00):

People wait for the money. They won’t wait for a delayed process. How about the deposit side?

Tim Wheeler (08:05):

The deposit side, we’re probably a little less than that, probably shortly below five minutes or slightly below.

Jim Marous (08:11):

Do you know where you are in the overall financial ecosystem from the standpoint of … you heard last night, we do research on a regular basis to find out, do you have a digital lending process? Do you have a digital deposit process? Which we did funded by MeridianLink. In fact, we just did our most recent survey.

Jim Marous (08:29):

And a very high percentage of organizations say they have a digital process. We then ask, do these people have to come into the branch to complete a process? A very high percentage of those that said, “We do digital require that.” Which just by those footsteps takes longer.

Jim Marous (08:46):

And then we ask, “Okay, let’s say you do do it digitally. How long does it take?” And on average it’s 15, 20 minutes or more. And there’s about 16, 14% I think it was, that can do it in three to five minutes. When you are on your phone, anything more than three to five minutes is lost time.

Jim Marous (09:04):

How long have you been down to that timeframe, roughly?

Tim Wheeler (09:08):

I would say it’s been a process. One of the things that we worked with when we launched with MeridianLink as we worked with their admin pro team to help build out the platform. And actually, our executive team took a detailed look at the entire application.

Tim Wheeler (09:25):

And again, we challenged the normal thinking and saying, “Why do we need to ask this question? Is it really necessary? If it’s not, let’s remove it. Let’s remove that point of friction to shorten that application time.” And ultimately, our goal was to reduce the application.

Tim Wheeler (09:44):

Initially, when we were working to launch MeridianLink, our goal was to reduce it down to approximately two pages of content. If they can fill out two pages of content, they should be able to do that in under five minutes and we should be good.

Tim Wheeler (09:56):

And we’ve been that way since with slight tweaks along the way, and some modifications. Combo apps has helped because they’re entering the information once to open their share relationship and to open their loan. So, we’ve built additional efficiency that way.

Jim Marous (10:09):

And fine tuning that and making it, okay, how do I make it so that there’s less touches of the screen?

Tim Wheeler (10:14):

Less clicks.

Jim Marous (10:15):

You look at the Apple credit card, I keep on going … they asked for flash images of Social security number, which makes it so they can look in the credit bureau and figure out who I am, how much money do you make?

Jim Marous (10:25):

I tend to think sometimes it’s a, oh, I’m sorry. First is it’s all this information we know about you by you on your phone. Which you can get if you’re not an Apple. You can get it from the different apps.

Jim Marous (10:37):

Then you get this process and the more you do that, the better you get and the more pushing you do along the way saying, “Geez, we got to fix that part of it.”

Jim Marous (10:45):

But you brought up an interesting point where you said you brought the team together and this is the mission. That is the biggest stumbling block we see in the industry is to get an organization behind that mission from the top.

Jim Marous (11:01):

Because when it comes to it, it’s not the technology because you can buy the technology, but bankers tend to get in their own way.

Jim Marous (11:07):

You mentioned that last night where they buy a solution that says, “I’m going to bring it to three to five minutes.” And then they create this friction and the vendor’s not going to leave, but they’re going to have to adjust significantly.

Jim Marous (11:17):

To have that be the mission, and it sounds like it’s an overall mission ongoing, continually fine tune it. You’re also, putting in measures security wise and otherwise that make it so you become better at what you’re doing despite going a different way.

Jim Marous (11:31):

So, did you see a jump in both lending and new deposit accounts when you got the digital process implemented in?

Tim Wheeler (11:39):

Yes. We’ve seen an increase, especially on the account opening side. And then that’s led to additional cross sells on the lending side as well. I think we’ve seen a 20% increase in pre-qualified and cross-sell activity since going with combo apps. And that’s a direct … it’s a tangible benefit.

Jim Marous (11:59):

It’s easy. They turned it on, it happened.

Tim Wheeler (12:00):

Yeah, absolutely.

Jim Marous (12:01):

And on the new account opening, we’ve seen it also, where people will abandon the process or it gets clunky. And if you’re the first person they came to, then they abandoned, they may never come back and they may find somebody who can do it faster. On the other hand, if you’re the last one, they may stick with you and all the pain that comes with it.

Jim Marous (12:18):

What’s interesting is we find that you can increase your new account openings by 40, 50% overnight. And I truly mean overnight.

Jim Marous (12:26):

So, the process itself — let’s talk about the digital loan process. The first wave of what you did, because it sounds like you’re continually iterating the first wave. How long did the process take to implement? Which is the hardest one because you’re going from paper and manual to digital.

Tim Wheeler (12:43):

We worked that project, and it was during COVID, ironically enough. We were working that project, we started at least 13, 14 months. Overall looking at everything and saying, “Okay, what can we do to streamline this?”

Jim Marous (13:03):

The whole thing was new.

Tim Wheeler (13:04):

Implementing e-signature, all of those different points of digitization of the process of building all of that in. It was easily and-

Jim Marous (13:14):

Part of that was because you didn’t know what you didn’t know. So, today, when you’re doing a iteration of something where you’re putting something new in, how long does it take to get implemented?

Tim Wheeler (13:23):

Relatively quickly. I think we are able to move relatively fast with the help of Meridian making-

Jim Marous (13:29):

Is it like a three-month process?

Tim Wheeler (13:30):

I would say 90, 120 days probably. Yeah.

Jim Marous (13:33):

So, that tells me, you’ve been banking long enough to know that 90, 100 days for anything was impossible. But COVID taught us something. When the government said, “Oh, by the way, you’re going to be doing COVID loans.” They told us on Thursday and we had to implement on Monday.

Jim Marous (13:47):

The excuse of we can’t becomes vastly less. You don’t stand for it much. We make excuses because it makes it tough, but you now, know who to bring into the room.

Jim Marous (14:00):

We talked about it again last night where bring compliance in on the front end because you’re asking for permission afterwards, it’s not going to go well. If you make them part of the process, they feel empowered, they can make their points, you can discuss them.

Jim Marous (14:15):

The higher up you go in the organization, that’s at that table as well, the less likely excuses are accepted. How long has your top management been in place?

Jim Marous (14:25):

Most of us have been there. I’m the longest tenured of top-level management. Our CEO’s been with us for eight years, COO, eight years, CIO longer than five years. So, we have a relatively stable management team.

Jim Marous (14:38):

You came in with a completely different mindset. And again, the culture, the leadership is going to be a thing that organizations struggle with because it’s really changing your whole organization.

Jim Marous (14:51):

And what’s interesting from what you’re telling me, you’re not doing it to save money. It’s not efficiency and automation for the sake of saving money. Although it does.

Tim Wheeler (15:00):

It does, yes.

Jim Marous (15:01):

And it’s not to make better fraud and risk decisions, although it does. It’s all for the member.

Tim Wheeler (15:07):

It’s the member experience. If you don’t provide them the experience they’re looking for, there’s so much competition today that we didn’t have five years ago. There’s FinTechs, there’s Apple, as you mentioned.

Tim Wheeler (15:22):

We have to build our model toward that end goal of competing now, with those new players in the market or members are going to gravitate to those-

Jim Marous (15:33):

And they already are.

Tim Wheeler (15:34):

And they already are. Yeah, absolutely.

Jim Marous (15:35):

And so, you have to also, make members aware what you’re able to do. So, they don’t move thinking my credit unions … because maybe they opened the account seven years ago and it wasn’t the greatest process. You got to somehow make them aware that before you go to X, Y, or Z we are that organization right now.

Tim Wheeler (15:55):

We can do that for you. Yeah.

Jim Marous (15:56):

And then it gets down to tracking and using data to build relationships. How are you moving as an organization? Because obviously, the digitization process at the beginning point, because it’s hard to use data for cross sell, upsell, and personalization if the process is going to be really not empowering after they do that.

Jim Marous (16:17):

So, you mentioned in pre podcast starting when we talked, saying you’re really now, trying to find better ways to make data work for you. What are you trying to do that way?

Tim Wheeler (16:26):

Right now, we’re looking at potential partner. Which we have a data warehouse today. So, we have all of the points of data on the member’s interaction with us at Fortera.

Tim Wheeler (16:36):

But taking that to the next point and helping translate that data into actionable insights about the member’s behavior and what can we do to further their financial life and help identify their next best product or what their thinking may be coming along for them that they may not even be aware of yet.

Tim Wheeler (17:01):

Whether that’s a new car purchase or whether that’s a refinance of an auto, or whether that’s buying their first home. Being there at that point and saying, “Hey, have you thought about this? Right now’s the time to look at here’s houses in your area that we think you might be interested in. You should go take a look.”

Jim Marous (17:20):

That’s interesting because people listen to podcasts and send my writing. I talk about the GPS financial services. I don’t want to know in the rear-view mirror what I already know. And you’re just reinforcing the fact that I had an NSF or I got a mortgage. I know that already.

Jim Marous (17:37):

I want to know how much can you help me in the path that I’m not aware of? Or at least give me suggestions. You may not be right but you are building relations and engagement when I know my financial institution knows me, understands me, and will reward me.

Jim Marous (17:54):

And it’s important because with what you’ve done, the way your culture is adjusted to what’s possible, it makes the thought process on using data, implementing insights, deploying those, a whole lot easier.

Jim Marous (18:13):

You’ve been doing this for a while now, and disruption is part of what’s within your organization, I would imagine it helps recruit people. Because we’re not the organization you’d think we’re, let me talk to you about this credit union. We’re not behind the eight ball. We’re ahead of the curve.

Jim Marous (18:32):

You have the same challenges, but also, I would imagine builds resilience where you can react to what’s going on. Everything sounds great.

Jim Marous (18:40):

What’s been one or two of the challenges you’ve had along the way that you go, “Geez, I didn’t see that coming,” that changed the way you did things?

Tim Wheeler (18:49):

Yeah. And not necessarily something that I didn’t see coming, but I’ve been in the CLO role now, for a little bit more than a year. 14, 15 months. And as I mentioned, I came from the consumer lending side.

Tim Wheeler (18:58):

So, one of my strategic missions right now, is how do I take the efficiency that we developed on the consumer lending side and how do I build that into mortgage lending? How do I make mortgage lending as efficient and seamless as possible to have? And I know you’ll never get to the same traditional experience and consumer-

Jim Marous (19:20):

A lot processes can be digitized.

Tim Wheeler (19:21):

But a lot can be digitized. And what do we need to do to take that next step? Because my CEO, our executive team and myself, we all share the same vision that we want to empower home ownership for our members.

Tim Wheeler (19:32):

And when members think about buying a home, we want to be their first choice. And I think in order to that we have to translate that efficiency gained and the knowledge that we have about consumer lending and translate that into our mortgage platform.

Jim Marous (19:45):

So, what you found when you’re doing this mortgage, when you’re moving forward, what you’ve done in the past works very well, setting the stage and eliminating things. So, again, all these implementations becomes less threatening to the organization and to you as the leader of that organization.

Jim Marous (20:00):

In addition, you look at the mortgage process, it’s more than just taking paper and turning into PDFs. It’s not digitalization. And the marketplace is not set up, but a partner like MeridianLink is positioned in such a way that that single app, everything else, I can eliminate steps if they’re already a member.

Jim Marous (20:20):

And that’s instrumental because you’re making the process easier for people that are shopping. And in some cases, you can pre-approve, you can do other things that you tend to do on the consumer loan side.

Jim Marous (20:31):

So, when you look at what’s going on, this universal … I’m going to call it universal app, what do you call it? Because I don’t want to call it wrong within the [crosstalk 00:20:40].

Tim Wheeler (20:40):

Yeah. Within our platform, we call it combo apps, but universal apps is a good way to phrase it.

Jim Marous (20:44):

This universal platform, how do you partner with your other partners with this new platform? So, you have a core provider that’s not ready. You have other partners that have to access data or where you access data from their platform for your app. How do you make these partners work together?

Tim Wheeler (21:03):

I think it’s about building the integration between all of them and with the goal of making it as seamless an experience, again, for the member as we possibly can.

Tim Wheeler (21:16):

Because a member doesn’t understand and doesn’t care that your core is this, your mortgage provider’s this, your consumer is this, and account openings, whatever. They just want it to be consistent.

Jim Marous (21:29):

They don’t know how the engine works. Yeah. They want to see, can I do it flawlessly?

Tim Wheeler (21:34):

Right. Can I start it and can I go down the road? And that’s what they want to see. They don’t care about all the behind the scenes stuff. They just want to know that when I need something done, regardless of the platform or regardless of the need, it looks similar and, in our case, it feels like Fortera. It feels like us.

Jim Marous (21:54):

So, that said, look at Fortera going forward. Let’s send you to-do list besides the mortgage process [crosstalk 00:22:05].

Tim Wheeler (22:05):

Yeah. Besides the mortgage product, to your point, you mentioned Apple earlier and their seamless experience from application all the way through to funding. I think the next step in our digital journey is to look at instant funding and instant satisfaction of that need for the member.

Tim Wheeler (22:26):

If they’re applying for a credit card, I’ve approved the credit card, I’ve funded the credit card, I’ve given them the opportunity to add it to their digital wallet immediately. They should be able to use that credit card five minutes from applying for the loan or applying for the card.

Tim Wheeler (22:40):

Similar experience with an unsecured loan. Can I take the application fully fund it, have the money in their share account or checking account the same day that they applied within minutes. I think that’s the next step that we need to take.

Tim Wheeler (22:53):

We’re not doing anything with instant funding today. I think that’s the next leap that we need to make for the institution.

Jim Marous (23:00):

So, it really is, again, using data, using AI, and preparing your organization for the generative AI process for some of this will become that whole mold.

Jim Marous (23:11):

I talked about the digital twin of the consumer. That the more they tell you, the more you can capture, the better you can do. Where they’re going to play that game with you because they get the value proposition.

Jim Marous (23:24):

At the end of the day, we’ll get all our live secrets away if we believe we’re going to get value in return. And the financial institution’s the best place to start that.

Jim Marous (23:35):

Thank you so much for being here. Your journey is really cool because you are on the cutting edge of what’s going on. There are very few organizations that I meet that are at that size. What size are you by the way?

Tim Wheeler (23:50):

We are approaching 900 million.

Jim Marous (23:52):

You just took my breath away. Because I’m sorry, we continually find that the organizations that are doing amazing things tend to be the smallest or the largest. You’re not huge. You’re not 10 billion, not 20, 30. 200 billion.

Jim Marous (24:08):

What’s interesting, you’re blowing through walls as an organization with modest resources, but again, it shows the power of composable solutions to get where you want to get and punch way above your weight.

Tim Wheeler (24:23):

Yeah. And that’s one of the things that we openly discuss at the credit union is we are a $900 million credit union, but let’s act like a billion or bigger when we make these strategic decisions.

Jim Marous (24:33):

I say, your site’s higher because there’s very few billion dollar bigger that even have done what you’ve done. But again, you’re close enough, you have fewer layers. You’re going, “Guys, we’re going to make this fun.”

Tim Wheeler (24:44):

Yeah, absolutely. That’s absolutely.

Jim Marous (24:46):

Again, thank you again, Tim.

Tim Wheeler (24:47):

Thank you.

Jim Marous (24:48):

I really appreciate the time. Thanks.

Tim Wheeler (24:49):

Yeah, absolutely. Had a great time. Thank you.

Jim Marous (24:50):

Thanks for listening to Banking Transformed, the top podcast in retail banking and the winner of three international awards for podcast excellence.

Jim Marous (24:58):

We appreciate the support we’ve received from MeridianLink in making this eight-part series of episodes a success.

Jim Marous (25:05):

This has been a production of Evergreen Podcasts. A special thank you to our senior producer, Leah Haslage; director, Dave Douglas; audio engineer, Chris Fafalios; and video producer, Will Pritts.

Jim Marous (25:18):

Thanks for joining us. Until next time, keep innovating and transforming.

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