From paper forms to channel of preference: what eight years of online lending taught us

Where we started

Eight years ago, in July 2018, we put our first three credit unions live onto our Decision Engine. The picture then looked a lot like Canada’s does today. Online loan applications were rare. Where they existed, most fed straight into a mail merge – a form submitted, a human picking it up on the other end, no faster than a paper application really. Some credit unions, like Wolverhampton, had no web presence for loan applications at all. Instant decisions didn’t exist. Open Banking was brand new. Everything ran on paper, patience, and phone calls.

Where we are now

Fast forward to today, and the landscape has flipped. Every credit union we work with now has an online application process. Across our client base 85% of all loans arrive online, and for some credit unions that figure climbs to over 99%.

The conversation has moved from whether to go online to how to convert more of the traffic we now have, and how to get more people using Open Banking data. Moving members onto their channel of preference didn’t happen overnight, and there were some surprising results along the way.

Speed creates its own problem

Once members could apply in minutes, they expected an answer in minutes. The result, in the early days, was a spike in inbound calls. Sometimes literally seconds after submission.

Applicants expected faster results, and they wanted to keep track of their application. Service levels aren’t being compared with other credit unions, they’re being compared with Amazon and Netflix. You can even track your takeaway pizza being built. So why not a loan?

The fix wasn’t a faster process (there’s a limit to that); it was communication. Automated emails triggered at key stages of the review – application received, under review, decision made – turned an anxious silence into a visible journey, and the calls dropped off.

Open Banking takes longer to land

Early adoption wasn’t as fast as anticipated. A big part of the reason had nothing to do with technology.

Applicants had spent years being told, implicitly and explicitly, not to share their financial data with third parties. Asking them to connect a bank account felt like it broke a rule they didn’t know they could break.

Some credit unions are now in the high 80% for Open Banking take-up, but it took repeated, careful framing that this is a secure and faster way to get a loan approved.

The goal itself changed

In the early years, the instinct was to gather as much information as possible from every applicant as more data felt safer. Today the instinct has reversed:

• Minimise the questions
• Maximise the conversion
• Let the data sources you already have (bureau, Open Banking, member history) do more of the work silently in the background.

Soft credit checks became essential conversion tools for lower risk applicants. With better real-time risk visibility came the ability to introduce risk-based pricing – matching the rate to the risk rather than applying one rate to everyone.

What’s next isn’t just about friction

Conversion still matters, and always will. Reducing friction is critical for growth. But increasingly fraud is the issue, especially as AI makes convincing fake documents and applications easier to produce.

As application journeys got faster and more automated, so did the attempts to exploit them. The next wave of work is less about how do we ask fewer questions and more about how do we verify identity from multiple independent data sources without adding a single extra step for a genuine applicant.

The takeaway for Canadian credit unions

For Canadian credit unions moving members onto the channels they prefer, this is worth holding onto: the technology problem is usually the easy part. We’ve made most of these calls ourselves, across more than fifty credit unions and eight years – when to email, what to ask, what not to ask, how to build trust in a data-sharing model members haven’t fully warmed to yet. We didn’t get that sequence right the first time either.

That’s the experience we bring to the table now, so the next credit union doesn’t have to learn it the hard way.