FirstOntario Credit Union is undergoing a process redesign powered by its purchase of Web-based loan origination software.

FirstOntario, headquartered in Hamilton, Ont., is Canada’s sixteenth largest credit union, with more

than $770 million in assets and 17 branches throughout the Niagara Region and Southwestern Ontario. The company has bought HomeBank Technologies Inc.’s ProLender to reduce the amount of pen and paper still involved in the lending and data transfer process.

“This will dramatically decrease approval time, and reduce the time salespeople spend selling with clients and processing applications,”” said CEO and president John Lahey.

ProLender is an XML-based application, allowing for “flow-through processing” — minimizing manual, human involvement, therefore reducing costs. “It allows us to talk to third party providers seamlessly, and give our users a cohesive interface,” said Bryan McCaw, CEO of Montreal-based HomeBank Technologies Inc.

The credit union’s 63,000 members will have the added value of applying for “cookie cutter”-type loans (credit cards, lines of credit) online — something already available at all the major chartered banks, according to IDC Canada analyst Warren Shiau. And service is key to credit unions, he adds, as their smaller business model means they don’t have the same opportunities for cost-cutting as the larger banks. “In terms of offering attractive service to a customer — giving the customer the option to bank online, or apply for something online, instead of having to come in to the branch itself — then yes, credit unions are competing,”” he said. “”They need to do these things in order to keep customers.”

Credit unions take a different approach to banking, Shiau said, focusing on a higher degree of client service at the branch level. Lahey agreed that ProLender will provide definite benefits for members. “The loan process will be a lot more efficient,” he said. “We will no longer send applications to a central office.”

FirstOntario did have an existing loan accounting system. It was included in the ICBS banking software the credit union implemented in conjunction with a partnership with Fiserv CBS Worldwide in February. But, Lahey said, ProLender’s Web-based platform and electronic third-party interfaces better fit the credit union’s requirements, and eliminated the need to build further software.

HTI launched ProLender in 2000, and has since acquired 23 per cent of the Canadian credit union marketplace. That’s because the company understands their specific needs, McCaw said. “Credit unions don’t have the resources of the major banks. So they have to do things co-operatively in order to have solutions which have the same technical sophistication. We give them the type of technology the big banks have, at a fraction of the cost.”

HTI has always focused on providing home-banking and loan application software to smaller banks and credit unions. “When we started looking for a loan origination system, we had a bias towards those companies that dealt with credit unions,” Lahey said. “We asked around and it often came back to HTI. We didn’t look very seriously at any other options.”

FirstOntario signed a seven-year contract with HTI, which includes a corporate ProLender licence, implementation, maintenance, support, and hosting. Lahey said HTI has already facilitated training for employees and the solution is currently being implemented with limited capabilities in the branches by FirstOntario. ProLender will be available to clients by the end of the year, followed by the launch of the solution’s credit decisioning systems, and an interface to the existing ICBS banking system.


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