Credit Union Overview
Credit Unions are a community-focused cooperative financial institution which is based on the concept of helping its members attain their socio-economic goals. Credit union software is to manage and enables improvement in efficiency and customer satisfaction. Credit union software is a core software for the credit union. Credit unions are established with the prime aim of extending a helping hand to the local community and help them improve their financial welfare.
Credit Unions are nonprofit institutions unlike banks since they tend to invest all their profit back into the organization or extend the profit as dividend to the members. Since they don’t operate for profit, the credit unions need not pay state taxes which gives them an added advantage to charge lower interest rates.
Credit unions are established and controlled by its account holders who are a part of the board of directors. The members elect their representatives at the annual meeting in a democratic way. Irrespective of the size of their savings, all the members have a right to vote and choose the board of directors. Though Credit Unions employ staff members to manage its day-to-day operation, the control lies only in the hands of the elected spokespeople, the board of directors.
The Loan Process
Based on the concept of community finance, Credit Unions focus on delivering financial services to a community of members. They acquire funds from their members in the form of savings and deposits which are then pooled together to offer loans to the members who are in need.
Since the credit unions procure money from its members and so they are paid interest or return on their investment which is mostly in the form of an annual dividend. The money obtained from the community is loaned out to its other community members who would pay interest on the amount borrowed.
It is vital for every credit union to attract an adequate amount of borrowers who deposit money to ensure a satisfactory level of liquidity for meeting the loan requirements of its members and the operating expenses. The only way to attract more depositors is to offer the savers a fair return on their deposits or savings.
The interest charged on loans is the major source of income for a Credit union. However, in order to keep up with the intense competition in the sector, a credit union may have to offer a competitive interest rate that ensures a decent profit which helps them meet their operating costs and dividend payment.
Challenges faced by Credit Unions
Credit Unions don’t seek profits; instead, they endeavour to maximise their community impact, they face a different set of challenges when compared to a normal financial institution:
The rather stringent regulatory requirements mandated by Government with regards to liquidity and capital tends to place a considerable amount of constraint on Credit Unions, making it difficult for them to achieve the growth they’re hoping to reach with the limited funds available.
The cutting-edge competition in the industry demands credit unions to offer low-interest rates to borrowers while offering adequate return for the depositors. In addition to this, the credit unions are expected to manage their operational expenses within the meagre profits they achieve.
As a result, they don’t have a lot of funds to spend towards operational expenses, so they might not be able to allocate a fair sum towards the infrastructure or staff expenses. This might, in turn, have a contradictory impact on a credit union’s potential to achieve its unparalleled vision.
Product Diversification and Technology Adoption
Quite a few credit unions have embarked on a product diversification mission to generate more revenue. While this seems like a good work around the limited funds, without satisfactory technology measures the workload of the staff members increase and have a negative effect on the overall performance counteracting the advantages offered by a diversified portfolio.
All these challenges can be overcome by credit union software like Finabile, which is a prominent loan software used by top lending institutions around the world.
Finabile: An all-inclusive Credit Union Software
Finabile is the most commonly used credit union software which offers all the innovative features and services available in a top-end banking software at an affordable cost. Credit union software is the accurate solution for credit unions on a credit crunch who could not afford to invest a lot in IT expenses.
Finabile’s user-friendly nature helps the staff members to process a loan product or make a note of a deposit or saving efficiently at a moment’s notice improving their productivity and reducing the overall turn around time of a process workflow by using credit union software.
In addition to it, our credit union software’s Cloud-based nature would ensure that it could be easily accessed over a browser from anywhere, any time saving a lot of time. Finable is a unified lending solution; its inbuilt accounting software and reporting module would eliminate the need for disparate software streamlining the entire process followed by the Credit Union.
Fully Automated Workflow
100+ Ad-Hoc Reports
Omni Channel Inclination
Lightning Fast Workflow
Highly Scalable & Flexible
Affordable & Cost-Efficient
Unified Lending Solution
Loan Lifecycle Management
Credit Unions function based on the deposits and savings they acquire. Hence the need for a reliable and trustworthy interface to keep track of the savings and deposits efficiently in mandatory. Finabile’s intuitive interface offers the right solution for this problem with its state-of-the-art savings module which would reduce the administrative overhead cost with its exceptional set of functionalities.
- Exclusive Term Deposit Ledger
- Variety of Term Deposits (Short-term, Long-term, Fixed rate, Variable, Low-rate, Cashable etc.)
- Built-in Savings Module
- Options to redeem, modify, sweep-in, block or unblock a deposit
- Pre-mature redemption or withdrawal
- Customizable workflow to monitor new TD’s and Maturities
The accumulated savings and deposits are lent out to the member at competitive interest rates. Since the members are a part of the union, the approval process would be slightly different when compared to loans offered by other financial institutions.
Finabile’s intuitive banking suite offers a complete loan origination system which makes the entire loan origination process a breeze with its infinite functionalities.
- Complete Lending Management
- Clear Amortization Schedule
- Link loan to Savings Account
- Option to repay loan in arrears or Advance
- Countless Transaction History
Finabile’s built-in document management system ensures paperless processing of loans reducing manual paperwork and in turn the room for errors. The cloud-based nature of Finabile not only reduces the time to retrieve a specific information but also minimises data redundancy and improves the productivity of staff members.
In addition to managing the loan portfolio and deposit ledger, Finabile’s loan management could also manage the organisational aspects and employees in the same interface.
- Diversified Loan or Savings Products
- Import data effortlessly from Excel Sheets
- Flexible Fund Mapping
- Robust Organisation Management
Finabile’s comprises of a robust collection management system which would streamline the collection process and completely automate it. The repayments will reflect immediately in not only the borrower’s account but also on the Balance Sheet of the Credit Union.
Our intelligent loan software will make the collection process transparent making the process of tracking and monitoring the performance of a loan a peaceful task. Risk mitigation is effortless, as identifying delinquencies and defaults is rather easy with our farsighted reports.
- Track Loan Performance
- Supreme Delinquency Monitor
- Instant Repayment Updates
- Variable Interest Rates
Finabile’s inherent accounting module offers all accounting functions available in a traditional accounting software in a nutshell thereby eliminating the need for dissimilar legacy applications.
Using our cloud-based accounting system instead of a conventional on-premise softwares, credit unions could cope up better with mounting pressure to incorporate new rules or regulations to improve visibility and assure compliance while restraining cost.
- Double Entry Accounting
- General Ledger Reconciliation
- Complete Account Statement
- Myriad of Accounting Reports (Income Statement, Balance Sheet, )
Credit Unions could easily generate financial statements or business intelligence reports using our 100 pre-defined reports. A report could be easily customized and tailored to fit the unique business needs poised by a credit union. Each report could be generated individually or scheduled to generate an email report automatically.
Finabile’s all-in-one interactive dashboard would give an accurate visual presentation of the available data and help the Credit Unions understand the performance and financial health of their organisation.
- 100+ Ready-to-use Reports (General Ledger (GL) Report, Balance Sheet, P&L Statement, Total Deposits, Outstanding Loan Value, Active Members, Non-Performing Assets, etc)
- 6 Normal Formats (Clients, XBRL, Accounting, Loans, Savings, and Funds,)
- 4 Formats (XML, XBLR, CSV, and PDF)