ROCKVILLE, Md.-When Silicon Valley veteran Juli Anne Callis was hired three years ago as CEO of National Institutes of Health Federal Credit Union, her charge was to accelerate the CU's use of the technology it already had on board. NIHFCU wanted to improve service to the tech-savvy doctors, nurses and research biologists that comprise its members today.

It has taken steps to do just that, and is now predicting "voice activation technology" will be the next big thing credit unions will need to adjust to.

"We adopted a bio-industry charter," said Callis. "and took a big jump in assets through the use of emerging technologies."

From the IT standpoint, the CU already had the tools in place prior to Callis' arrival. NIHFCU licensed the FICS mortgage loan origination and servicing systems and the Mortgagebot point-of-sale platform. Callis said those systems are all "state of the art." That was the good news. The bad news was NIHFCU was underutilizing those tools' potential to drive more revenue and instead, , like many of its peers, was originating a trickle of mortgage loans through its branches and then holding those loans permanently in portfolio.

That has changed under Callis. For one thing, NIHFCU began leveraging an around-the-clock call center provided by CaLLogix in New Hampshire to handle inbound calls on an outsource basis, at a significant cost savings. For another it started selling mortgage loans into the secondary market.

NIHSFCU is currently servicing $200 million of mortgage loans on its FICS loan-servicing platform, awaiting sale of the loans to Freddie Mac. All those loans were originated online with no increase in staff, Callis said.


Results Improve

Data supplied by the credit union show that between third quarter 2008 and fourth quarter 2011, NIHFCU increased its servicing portfolio by 39%, compared to a 5% increase by its peers. Between 2007 and 2011, the credit union's assets rose from $360 million to $541 million while the CU reduced employee headcount from 151 to 125.5 full-time employees. Since Q4 2008, National Institutes of Health FCU has managed to reduce its operating expense ratio from 5.5% to 4.1%.

NIHFCU generated $7.4 million of cumulative net income since Q1 2009. "Our primary channel for that was digital," said Callis. "Nintey-five percent of our business is coming through the online channel."

The CU currently originates some $15 million a month in mortgage loans and expects to double that closed-loan tally in the near future by selling to Fannie Mae as well as Freddie Mac.

To validate its migration away from the branches to the online channel, "we did focus groups over and over again," Callis said. "They showed us that once we put the technology in place to work with progressive younger members, we would get results."

To that end, she said, NIH plans to use the new Mortgagebot consumer-lending module for originating a niche product line to help members refinance their student loans.

Although the CU is realizing substantial cost savings via technology, Callis said saving money is not the primary driver. "Our increasing reliance on technology is market driven, consumer driven," she said. "Members don't want to go to a branch to apply."

What's Coming Next

While continuing to pursue its strategic focus on automation, she said, NIHFCU plans to increase its staff of veteran mortgage loan officers because "the SAFE Act is stepping up the level of expertise required for consumer-facing employees."

Over the long run, Callis said she is confident that NIHFCU members will embrace all the self-service tools the CU can throw at them. "Voice activation technology across multiple channels, like Apple's Siri, will be the next big wave," she predicted, adding that she expects that automated customer relationship management (CRM) technology will eventually guide the CUs members through the mortgage-loan application process.

Callis said voice-activated online guidance supported by artificial intelligence can offer a consistent user experience, matching or exceeding the quality of advice a live loan officer can provide. Moreover, she said, for dispute resolution "a voice-activated process lets you archive the transaction in case you need to remind the consumer what they actually said and did."

To optimize the way it deploys technology to benefit members, Callis said the CU is "in process" of building out a relational database management system to pull together multiple data sources in real time for every transaction.

Subscribe Now

Authoritative analysis and perspective for every segment of the credit union industry

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.