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SMS Banking: Why Credit Unions Need Conversational Lending

Picture of Jamie Lovell, COO
Introduction
Modern consumers expect instant communication and seamless banking experiences. Yet, many credit unions still rely on email, phone calls, or in-person visits for loan applications and servicing.
 
🔹 85% of borrowers prefer text messages over calls for loan updates.
🔹 80% of loan inquiries can be handled by AI-driven SMS automation.
🔹 Text-based lending boosts loan conversion rates by up to 30%.
 
Conversational lending via SMS is no longer optional—it’s the future. Credit unions that adopt SMS-based lending automation will see faster loan processing, higher member engagement, and improved satisfaction.
 
 
The Problem: Traditional Loan Engagement is Too Slow
 
❌ Phone calls & emails take too long, reducing conversion rates.
❌ Loan status updates require manual follow-ups.
❌ Missed opportunities—borrowers abandon applications due to friction.
❌ Member frustration when they can’t get real-time answers.
 
Solution: AI-powered SMS banking enables real-time, automated loan processing via text messages.
 
 
How Conversational Lending Works
 
1️⃣ Loan Recapture through SMS
• Borrowers use point of sale application to start a loan application.
• Member abandons application process
• AI-powered chatbots reach out and guide them through the remaining process using SMS.
2️⃣ Pre-Qualification
• AI requests required documentation, extracts borrower data and returns loan status information
3️⃣ Loan Status Updates
• Automated texts notify borrowers of approvals, missing documents, and funding status.
4️⃣ E-Signatures & Funding Confirmation
• Members e-sign via mobile, eliminating paperwork delays.
5️⃣ SMS Support
• Bi-Directional SMS allows team members to address questions, make adhoc requests and interact with members where they are.
 
 
ROI Impact: Why SMS Lending is a Game-Changer
 
✅ Loan processing time reduced by 30-50%
✅ 30% increase in loan applications through text-based convenience
✅ Higher borrower engagement & satisfaction
✅ 40% reduction in call center volume with bi-directional sms.
 
 
Final Thoughts: The Future of SMS Banking
 
SMS-based conversational lending isn’t just a trend—it’s the most effective way to engage members and speed up loan approvals.
 
📢 Want to accelerate your credit union’s lending process? Start with Shastic’s AI Agents for banking to automate loan workflows, enhance member experience, and boost conversions.