Customer Experience Transformation: The New Driver of Digital Lending Success

The banking industry has found itself abruptly thrust into the intersection of:

1. post-pandemic customer expectations;

2. fast-paced growth in digital-lending technology; and 

3. the demands of consumers.

For banks that had long relied on traditional ways of lending, the global pandemic forced them into a digital shift in mere months. Most expected this transformation to take years. 

As many adaptations resulting from the pandemic eventually lifted, the drive toward digital lending services gained speed. Even the most skeptical customers and businesses have grown accustomed to engaging with their bank online. They expect to be able to do everything they need from their phones. 

Going forward, it’s abundantly clear that the key to success lies in the customer experience. 

No matter their size, banks that want to compete will need to strike the perfect balance between:

1. Offering digital lending platforms that allow customers to self-serve effortlessly and efficiently.

2. Crafting personalized experiences that can seamlessly support digital and in-branch services.

Even though the industry-wide landscape has clearly shifted, community banks in particular have struggled to keep pace. This is causing suboptimal experiences for borrowers, lenders and back-office staff. 

The 3 Major Barriers Community Banks Face on the Road to Ideal Customer Experiences 

Reluctance to Invest in Tech

Many community financial institutions still haven’t been able to catch up and deliver a true digital or mobile-first experience. This is partly because community banks frequently overestimate the cost of investing in digital solutions and underestimate the potential returns.

Smaller banks may see their limited budget for tech as a hindrance to innovation. Yet, their smaller size possesses a distinct advantage in agility and experimentation due to their reduced organizational complexity. Instead of seeing asset size as a roadblock, banks can see this as an opportunity to drive efficiency and experience across their bank teams and customers and compete with the bigger banks. 

The Imbalance Between the Consumer and Commercial Sides of the House

Historically, community banks have devoted more attention and resources to their retail side compared to their commercial division. In many respects, this prioritization aligns with the larger number of consumer accounts and loan volumes. However, when considering the return on investment, commercial clients often bring significantly more value to the bank.

Unlocking greater opportunities in the commercial sector can help a bank boost its revenues and establish its differentiation strategy. The bank could consider a specialized range of loans, spanning from small business financing to agricultural loans, with the aim of becoming a major player within their loan focus. 

Overlooking Key Constituents

Every user matters, from the end customer to the bank employee. Unfortunately, banks and their tech partners have not always given equal weight to both types of users. Your bank might have a fantastic front end with an impressive user interface that delights customers. On the other hand, the bank team might be struggling with poorly designed workflows and complicated data collection and reporting. 

When one in six Gen Z and Millennial employees has left a company due to inadequate technology to support their roles, it’s crucial to consider both the consumer and the bank staff equally. 

The 3 Components of an Excellent Borrowing Experience

Today, your core business strategy needs to focus on developing an experience that is intuitive, convenient, and efficient for your borrowers. 

According to J.D. Power, secure, quick processes and easy-to-understand applications are considered basic fundamentals. You now need to consistently deliver these core fundamentals in a more streamlined digital experience for all customers. Just over half of consumers, however, said their lender delivered on these basic elements.

That means there is an opportunity in play. And for innovative community financial institutions, the biggest question seems to be:

“What solutions do we put in place to create the optimal digital experience without compromising the personalized touch that customers value?” 

Let’s explore three important approaches.

Develop an Omnichannel Experience 

To differentiate your institution and satisfy customers, your bank needs a platform that allows you to engage customers across multiple channels in a consistent manner. A truly omnichannel experience serves customers seamlessly online, in-branch, and in the community within one unified platform.

Take, for example, Sara: Sara visits her bank’s website to review her consumer loan options. She begins her application online. She’s a bit unsure about some details, so she visits her local branch the next day. Her branch representative can see Sarah’s online activities and guides her through the initial stages of the loan application process, picking up right where she left off at home to deliver a personalized experience.

This notion of flexibility and convenience further extends to the commercial side. Consider the ability to take this platform directly to the customer’s place of business, serving them right where they work. Or, with the right customers, setting up embedded finance or banking-as-a-service (BaaS) solutions. 

Take for example, a local seed store: The store offers loans for seeds and supplies to farmers. The seed store facilitates these loans, but the bank is actually them. Both the bank and the seed store have a shared interest in making the loan application process efficient and straightforward. And the bank needs to ensure it’s capturing the right data to fulfill its regulatory and compliance obligations. 

Leverage Integrations 

Integrations are key to creating a seamless and efficient lending process for both the customer and the bank. Their main objective is to lighten the load for the applicant by minimizing manual data entry and eliminating redundant tasks. When an existing customer initiates a loan application or requests credit, the LOS can instantly access the customer’s historical data from the bank’s core. This includes personal information, contact details, income statements, credit scores, and more. This retrieval not only saves time but also ensures accuracy by eliminating the need for customers to manually input information.

The power of integration partners goes well beyond data entry. Through strategic partnerships and integrated systems, banks can spread tax returns, pull credit, generate flood certifications, and much more, all within one platform. Additionally, these integrations consolidate all data into a single platform. This helps to combat the “platform fatigue” often experienced by staff when switching between multiple systems.

Elevate Team Members With Intelligent Workflows

We shouldn’t use digital solutions to justify reducing staff. Instead, they should elevate team members out of archaic busy work and into their best and most productive use: establishing and growing customer relationships. A robust tech stack that can support automation and intelligent workflows can actually help attract and retain top talent. 

The aim should be to optimize application routing and task delegation within your team quickly and accurately in order to reduce unnecessary work. For instance, if underwriting begins working on an application only to discover that vital data is missing, the process must rewind, causing delays.

This is where Core10’s Accrue solution shines. Accrue ensures that workflows trigger only when all necessary data is available. It smartly assigns tasks only when it gathers all related elements, eliminating unnecessary back-and-forths. 

Accrue’s omnichannel experience can help borrowers start and stop the loan application anywhere. While its pre-built integrations pull core and fintech partners into one system to help banks effortlessly connect with various data sources, credit bureaus, and financial systems to eliminate rekeying data and enhance accuracy. The platform’s configurable decisioning engine provides instant pre-approvals and automated verifications – helping fund loans faster and easier. 

Accelerate Toward a Better Digital Lending Experience With Core10

As the competition for customer loyalty shifts toward an optimized and secure lending experience, Core10 stands as a leading ally for community banks. We’ve designed Accrue specifically for community FIs to help streamline the lending process, advance customer engagement, and empower bank staff.

Learn more about how Core10 can help you establish a smooth road to digital transformation and fund loans faster. Contact us.