Configurable Automation: How a new tech approach is making it affordable for Credit Unions and Banks

How Configurable Automation is Making Advanced Tech Affordable for Credit Unions and Banks

Digital Transformation, Self Service Digital capabilities, Workflow Automation, Robotic Process Automation - these are just some of the several buzzwords you must have come across. All of these allude to one singular outcome - a CU or Bank’s ability to enable “Instant Service Delivery” When the customer wants it (“Always On”) and Where the customer wants it (“Multi Channel”). 

How many of the 4,572 Credit Unions and 5,083 Banks in the country do you think achieved end-to-end automation for Lending or Deposit account opening? Surprisingly, only a select handful and some neo banks, and they could do it with an army of software developers that they could afford to hire. For the remaining 9,500+ Banks and Credit Unions, it was either too expensive to hire developers to achieve these results on their own, or there were no solution providers who could deliver such capabilities to them.

Fast forward 2022-24, select fintechs (including CreditSnap) have cracked the code, and figured out how to deliver such end-to-end automation without breaking the bank (pun intended). However, it took automation technologies almost two decades to get here, and they went through 3 distinct phases of evolution. Let us take a closer look at this evolution:

1. Workflow Automation Phase (Up to 2015)

Initially, FinTech solutions were primarily designed to automate back-office workflows. These automations were only available for the CU and Bank employees, and not to end customers - so not “Self Service.” These legacy systems focused on delivering some employee productivity gains to Banks and Credit Unions, but zero to very limited self-service capabilities. They were mainly adopted by large institutions that could afford the hefty price tag of custom software development. But their rigidity made it difficult to adapt them according to the changing market needs.

2. Self-Service Automation Phase (2015 - 2022)

Product teams started working on automation features that offered greater flexibility by integrating various technologies. This phase marked a significant shift towards more self-service options. These options empowered both the bank staff and the end-users by enabling direct control over their interactions. However, the reliance on a large team of developers and the difficulty of integrating disparate systems made them very expensive, as well as complex to maintain. These issues restricted the use of automation to just the big banks while neglecting smaller institutions. 

3. Configurable Automation Phase (Since 2023)

3 FinTechs in the US, including CreditSnap, are now capable of delivering end-to-end automation in Lending, Deposit, or both as cloud native SaaS products. However, Credit Unions and Banks are surprised by the wide range in price and affordability between these solutions. It is important for leadership teams to understand the concept of “Configurable Automation” as that is what is driving this variability. 

• Traditional FinTech Tech Stack: If a FinTech is always relying on one or more developers to set up the automation framework for a new CU or Bank customer, that right there translates to higher costs to the FinTech - and guess who has to bear those higher costs? That Bank or CU, of course.

• “Configurable Automation” Tech Stack: On the other hand, a fintech product that adopted the “Configurable Automation” approach can deliver a different value equation to you. They also rely on developers, but developers are focused on new features and not on new customer activations. New customer (Bank and CU) activation is 95% managed through Configuration instead. So, a new breed of Configuration Analysts - instead of software developers - are able to accomplish the automation setups for new product activations. That translates to affordability, and is the difference between CreditSnap and other fintechs, and how CreditSnap’s “Configurable Automation” is driving value and transformation. These solutions can be easily deployed at any number of new Banks and Credit Unions within a matter of days.

Impact on <= $10B asset size Credit Unions and Banks:

The table above indicates that 4,551 of the 4,572 credit unions in the United States hold 75% of total assets - highlighting the need for affordable and efficient technological solutions for the main street Credit Unions. Same distribution is also observed with ABA data for Banks. Configurable automation offers a much needed lifeline to the 75% - by providing them tools required to stay competitive in an increasingly digital world.

Thanks to the FinTech solutions like CreditSnap, a true end-to-end automation solution that previously cost three times as much with Phase II technologies, now costs only a third of that. This massive cost reduction opens up new possibilities for credit unions to invest the savings in other areas like Financial Product Innovation, Better Rates and better Customer Satisfaction in general.

Final Thoughts

The new-age Fintechs have successfully leveled the playing field for all community banks and credit unions. They have truly revolutionized accessibility and efficiency by enabling smaller institutions to provide high-quality services that were once the exclusive domain of large banks. Now, you can gain first-hand experience of the revolutionary impact of these Configurable Automation Solutions on Lending and Deposit Account Opening by scheduling a personalized demo at a suitable time.