The Profit Potential of Improved Indirect Lending

By ImageSource Team on March 7, 2023


For financial services organizations, diversification is the key to both healthy growth and a sound portfolio. Indirect lending (the process of providing loans to consumers through a third-party such as an auto dealer) offers a uniquely rewarding opportunity for community banks and credit unions – and for good reason. Despite inflation and increasing rates, credit unions alone saw a 15% increase in indirect lending transactions in 2022. All indicators point to this trend continuing through 2023 and beyond.


The indirect lending market sees both established financial institutions and newcomers angling for name recognition and business volume. The competition is especially fierce in auto lending, as inventories continue to be lower than average. To win transactions, credit unions and community banks must adapt to new and evolving operational demands.

Here is what our customer-partners are telling us:

  • It is a challenge to manage an expanding network of relationships with unique requirements. Dealers and retailers have different selling cycles, financing needs, and expectations.
  • Lenders and dealers need increased process transparency no more “blind spots.”
  • The funding process lags behind the loan origination and credit scoring processes. To win transactions and develop partnerships, financial services organizations must disperse funds faster and more efficiently without sacrificing compliance.

Organizations without modern processes turn to the basic tools they have always used – paper applications, digital PDF forms, and email as a workflow. Staff must key data into multiple business systems because the process requires it. These low-value, administrative tasks damage employee morale, limit productivity, and delay fund delivery.

A Unified Indirect Lending Experience

The good news is that financial services organizations can improve lending without ripping and replacing current technology. Most already have all the component elements of an effective lending system – meaning that strategic, affordable process-innovations are all it takes to improve human-to-system and system-to-system interactions.

Process innovation applications plug into the common gaps of indirect lending – making it easier to onboard content for faster determination of eligibility, and driving the processes that fund dealers within (or ahead of) SLA timelines. Smoother information exchange and funding pay off with better partner relationships and retention. 

Lenders can gain a competitive advantage by providing a cohesive, intuitive user experience with visibility into the lending process. Those on the forefront are offering dealers a seamless, unified interface for initiating loan requests, providing documentation, and monitoring transaction progress. Chat, email, and scheduling features enable all parties to remain engaged regardless of time or location.

Success Story

ImageSource recently helped a financial services customer-partner improve its indirect loan funding process – enabling the organization to over-achieve its dealer established Service Level Agreements and process 27% more funding requests without increasing staff.

During the project kickoff, we asked questions designed to chart processes and identify challenges. Based on that discovery, ImageSource professional services staff designed and configured a custom ILINX Capture and Intelligent Workflow solution that immediately allowed the organization to migrate processes away from its insufficient WorkflowXtender legacy system without impacting other line-of-business applications. New analytics capabilities now help the organization identify and resolve bottlenecks as soon as they emerge.


Process innovations that improve lending efficiency, funding delivery, and the user experience create business advantages for lenders who embrace modernization. Organizations have unrealized opportunities to improve the function and cohesion of the systems they rely on. Instead of undertaking disruptive “rip and replace” transformations, indirect lenders stand to gain large benefits by making strategic, modular process improvements to existing processes.

Want to know more about how ILINX improves systems and processes for customer-partners in the financial sector? Read our financial industry success stories to learn about our collaborations with Experian and others.


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