Before 2020, the finance industry’s digital banking transformation was a gently accelerating trend. Customers liked digital banking for its ease and flexibility; institutions enjoyed saving on hiring costs and brick-and-mortar infrastructure. So why can so few apply for a car loan via the web?
Branch Traffic Declines
During and after 2020? The pandemic shifted the speed of digital transformation from “gentle” to “sprint.” Anyone unsure about transforming either pivoted quickly or faced being left in the dust.
In August, the Bank Administrative Institute published research showing half of bank consumers were using digital banking products more often since the COVID-19 outbreak.
It’s a trend echoed by the Credit Union Times in a recent article.
Moreover, industry thought leaders think these trends are likely to be permanent. Why?
Consumers became vastly more comfortable with e-business during the pandemic largely because they had to. Take restaurants: people who could no longer visit their favorite restaurants in person ordered more meals via the internet than ever before. According to ResearchAndMarkets.com, it’s a process a lot of diners have grown to embrace: they predict the online food delivery services market will be worth nearly $150 billion by 2023.
It’s not just dining – increased comfort with doing business online changed consumer expectations across all industries, including banking. If you’ve made the digital pivot for your organization or will soon, it’s more important than ever to make sure your processes are solid and you’re able to serve the needs of a rapidly changing market.
One way to do that is making sure your loan origination software (LOS) meets the latest digital expectations.
Changed Experiences, Changed Expectations
An LOS isn’t just a system that opens accounts and processes applications; it’s the public face of your business and the way that your customers interact with you when they need a loan.
Here are five things to consider when looking to switch to a new LOS system that will help you increase loan applications and velocity, particularly with Millennials:
- Keep Your Head in The Cloud: By using a web-based SaaS platform, customers with concerns about COVID can open accounts, apply for loans and check application status in your LOS software from the comfort of their homes. Also, organizations can avoid budget pits such as expensive on-site equipment and maintenance costs, as well as taking advantage of secure cloud-based digital infrastructure and the collaboration it enables.
- Automatic Beats Manual: If you use a smartphone, you likely know how often software updates. Look for software platforms that update automatically, sparing your customer the worry and frustration of needing to regularly check for updates and manually install them.
- Seamless Integrations: Having software that works with other popular systems adds functionality and is fundamental in creating better user experiences. For example, MeridianLink’s XpressCollect integrated payroll module is integrated with BillingTree’s Payrazr payment portal system, an integration explored in this webinar recording: Improve Efficiencies and Optimize Your Organization’s Collection Process.
- Let the Software Do the Legwork: Software platforms that take on onerous manual tasks can deliver your staff from time sinks and make a software environment so user-friendly anyone can be trained to manage it.
- Listening Matters: Bottom line, your software provider works for Consider a provider who listens, has a track record of providing good advice and also accepts your suggestions.
Mobile Banking: Another Accelerated Trend
Mobile banking is another trend that accelerated during the outbreak. In May 2020, Fidelity National Information Services conducted a study in which nearly half of respondents reported changing how they did business with their banks since the start of the epidemic; 31% said they’d continue to use mobile and online banking in the future – and that can now extend to loan applications if you have the right LOS.
That’s why having a mobile-responsive platform is key. Allowing customers the same options and tools they have on their desktop with the mobile version of your software is a great way to retain them.
The Bottom Line
In addition to helping to accelerate loan origination, digital transformation is great for your bottom line, overall. An MIT study found companies that digitally transformed were 26% more profitable than those who didn’t.
Imagine what that percentage was in 2020 or will be in 2025. Where will you be?
A Look Ahead
Last year changed more than our health habits – it made foundational changes to the way we do business. As a leading provider of technology for banks, credit unions and independent mortgage lenders, MeridianLink has been at the forefront of the digital revolution with web-based LOS platforms and collections software such as LoansPQ and XpressCollect. MeridianLink serves 63 of the leading 100 credit unions and 50%+ of Forbes’ 2020 Best Credit Unions.