In 2007, Dave Buerger started CuneXus because he saw a problem that needed solving. The credit union he worked at used traditional targeting practices to identify members with a high propensity to accept a loan offer. Then, they’d send them a direct-mail, pre-approval campaign, but they were noticing that a large portion of creditworthy members was never receiving those offers because they didn’t fit the targeting parameters. “There was a large segment of our membership that wasn’t receiving the benefit of preapproval. So, we came up with this concept of Perpetual Approval — taking a really deep look into the data that we have about every individual credit-union member: what products they have with the credit union, what products they have with other institutions, and their overall credit profile,” Buerger says.
This new Perpetual Approval concept meant that members could know exactly how much credit was available to them 24/7/365, whether they need a loan for vehicles, credit cards, personal loans, home equities or anything in between. “They always know exactly how much they have available to borrow and they can literally click to accept those offers,” he says. “This is as close to a one-click lending experience as is available today.”
In October 2020, CuneXus was acquired by CUNA Mutual Group. They served more than a hundred institutions at the time of the acquisition and that number has more than doubled since. The CuneXus platform currently generates over $26 billion in loan volume annually. We gave Buerger a call to learn more about how credit unions can use enabling technology like CuneXus to create a more efficient, more human experience.
When we first came on the scene, fintech was new and mainly talked about as a competitor to banks or credit unions; fintechs were out to eat their lunch. But we never viewed it that way. We are an enabling technology for credit unions, in the same way that origination systems, core banking products, or digital banking services would be. So, CuneXus fits into that class. We partner with our credit unions in a totally white-labeled fashion, to enhance what they already do through automation. We're not changing the way that they underwrite loans. We're not delving into things that are out of their comfort zone. We take their existing lending policy, we automate it, we make it far more efficient, and we activate all channels for the members to take advantage of these 1-click loan offers.
There are multiple classes of fintech out there and we just happen to be enabling tech, which is complementary to credit unions. So, we partner with credit unions, it's quite similar to the way Unifimoney would. We exist to serve them and to help them better serve their members.
Yeah, absolutely. We were purchased by CUNA Mutual group about two years ago, and they've since established a fintech solutions group focused on that very same thing. They're investing in fintechs that are enabling credit unions and community banks to better serve their customer base by being more efficient or offering additional value. Within CUNA Mutual’s Fintech Solutions Group, we're building new products and investing in exciting new startups, all with the goal of empowering credit unions with best-in-class technology.
Yeah, I think that's the reality we live in right now. We're not trying to completely replace all human interaction. I don't believe that people want that. There will always be situations where people want a human being to talk to. There are also checkpoints within any lending process where I think it becomes necessary and responsible for a human being to take a look. There will always be applications on the fringe. You can't automate everything, but you can leverage technology to improve processes and experiences.
Data is an incredible asset. Data, machine learning, statistics and all the modeling that we can do, can certainly create tremendous efficiency. But in the near future, I don't see a reality where we've eliminated branches or call centers, in favor of full automation or anything like that. There's still a need for human contact.
Yeah, look at why credit unions exist historically. People are drawn to the local aspect and the fact that they are community-based institutions. There’s a friendliness and familiarity. If the technology playing field was completely even across the board, why would credit unions need to exist? The community factor and on-the-ground attention are differentiators, and we need to build on that.
It's funny. When we came to market, we were talking about automated lending, and there was a fear that we were trying to replace the loan officers. Credit unions worried that people were gonna lose their jobs over this. We heard that concern from our clients early on: are we going to be laying off loan officers? But that's not at all the case.
What we’ve found is that automation can address the low-hanging fruit. The people who are going to be automatically approved through automation should never have needed a loan officer spending time on the application in the first place. Because that's taking them away from the applications that do need that human touch. There are plenty of folks who don't fall into the automated-approval guidelines, but that doesn't mean they're not credit-worthy. It just means that they need more validation and that there are other checks that need to occur. So, by freeing up the loan officers' time from all of these easy approvals, and allowing the focus on doing what they do best — evaluating risk on these edge cases — you add efficiency.
We haven't heard of anybody losing their job because of our product. In fact, we've heard the opposite. Several clients have hired additional staff either to take on the inbound leads and increase traffic that we're causing for loan applications. They need people to fulfill the increased deal flow and administer the software. So, we're proud to say that we’ve actually created quite a few jobs along the way.
At CuneXus, we totally agree. For example, one of our tools is an in-branch, cross-sell piece. What's happening is that our offers are being created for these members — there might be eight to ten loan offers out there — and when they walk into the branch to conduct business, those offers are now right in front of the teller. Because they're firm offers of credit, they can be taken advantage of right away. The teller can push a loan to origination in less than 10 seconds.
So, the automation is actually empowering that teller with information that they can use to better do their job and better serve the member. The technology eliminates that still-too-common negative experience of sitting down for 20 minutes to fill out an application only to find out you're denied. You deny someone on a loan application, and they're not coming back. You've lost their business. The next time they need a loan, they're probably going to go someplace else.
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