By Ray Birch
MERIDIAN, Idaho—How important is it for a credit union to have access to “live” data from its core platform? One small CU used that information to first get out of the indirect auto lending business, and then get back in.
The $83-million Clarity CU here began accessing real-time data via a dashboard tied to its Prodigy core system from CU Prodigy, based in Salt Lake City. That information made the credit union aware many of its indirect dealers were not meeting the credit union’s expectations, leading to risky loans that were ultimately going bad, the credit union said.
“That live data showed many dealers were not performing, and told us that our best decision was to get out of indirect lending,” Chief Lending Officer Dan Edgerton told CUToday.info. “By building some custom reports, we were able to identify a growing problem with zero-credit loans.”
That led the Clarity CU to exit indirect a few years ago, let the indirect portfolio run off, and then get back into the business a few months ago. It was the same data used to drive both decisions.
Close Monitoring
But the key to having the confidence to get back into indirect, said Edgerton, is using the dashboards closely to monitor activity from each dealer.
“For example, we can quickly turn off a dealer with too many charge-offs,” Edgerton said. “This data allows us to re-enter the game more conservatively. We’re taking things slower, and not allowing dealers to write subprime loans. That was a problem in the past. It's important to have close tracking of the dealers to follow the type of loans they're giving you, and their performance. Now, too, the dealers know we're really watching them.”
Clarity currently is working with 20 auto stores.
“If we spot a dealer who is not working out, we can stop things with them immediately and there's a good chance we won't work with that dealer again,” Edgerton said.
The biggest problem with standard reports from a core processing platform is that they quickly become outdated, according to Clarity CFO Nick Fugal. The lower the frequency, the more outdated the report.
“Through the open architecture and relational SQL database from the Prodigy core, the credit union leverages widely available tools like Microsoft Excel to obtain real-time data for reporting and analysis,” explained Fugal. “Being able to access live data has opened many doors for us.”
The simplest example, according to Fugal, is the credit union’s branch goals reports. “Our branch managers can click refresh at any moment and see exactly where they stand,” said Fugal. “Another branch executive report gives the managers instant access to demographics and other important data.”
Nick Fugal
Faster Financials
Fugal said he gets his financials done in less than a day with the dashboards.
“At one point, month-end financials took up to a week to compile,” he said. “At our size, we can’t afford to hire a SQL programmer, but that hasn’t held us back. Prodigy has always been very good about sharing the SQL code for the reports they create. We just plug that code into Excel and we’re ready to go. We can then customize each report as needed.”
Fugal said credit unions on the core work together.
“When I need a custom report that Prodigy has never created, there’s a good chance some other Prodigy credit union has,” Fugal said. “Just recently I needed a new report, so I emailed a peer in Utah. He had exactly what I was looking for. A few minutes later, I was up and running with precisely the report I needed.”