Posted by MeridianLink | March 16, 2021

Are You Faking Digital Lending?

Today’s consumers expect to conduct their financial lives online. They want to be able to save, invest, make large purchases, apply for loans, and receive funds quickly from their laptops and smartphones.

Though social distancing requirements imposed by COVID-19 accelerated the need and demand for digital services, it’s a trend that is not going away.

To stay competitive, financial institutions must provide digital processes that are thoroughly integrated, easily accessed and simple to use. There’s no good reason not to: the intuitive, secure, compliant and end-to-end online loan experience consumers expect is completely achievable. And yet…

“Faking” It in an Era of Digital Lending

fewer than half of financial institutions have implemented digital lending – and some of those think who think they have, really haven’t. They’re faking it, whether they realize it or not. Fillable PDFs are not digital lending. According to the 2020 Digital Banking Report, only 85% of financial institutions let consumers apply for a loan online and only 44% make it possible to apply from a mobile device.

And even those numbers are a bit rosy: only 66% of financial institutions allow the entire loan process to be completed online, and only 46% from a mobile device.

The fact is, if your organization offers “digital lending” but doesn’t allow the consumer to complete the process entirely online, you’re offering what’s known as fake digital lending.

Fake digital lending frustrates customers who may have started the loan process thinking they could complete the entire journey online. When they discover they have to wait, or communication is spotty, or they have to make an in-person visit, it can cost you their business.


Keys to Digital Lending Success

In the September 2020 Banking Report, CEO Jim Marous writes, “The key to success to digital banking transformation will be the ability to support transactions and engagement seamlessly, across platforms, with the fewest number of steps. Ease of use is the new digital differentiator.”

Digital differentiators will determine your success in 2021 and beyond more than anything else your organization does. When two-thirds of financial institutions don’t offer true digital lending? The other third wins. It’s all too easy for customers to take their loan applications elsewhere.

According to the 2020 Banking Report poll, most banks and credit unions share the same goals for 2021: 

  • 75% said digital banking transformation was their highest priority
  • 51% said improving the customer experience was next on their list
  • 47% said managing costs was more important than driving growth or managing risk

Of the 25% who don’t have their sights set on a digital banking transformation this year, unless they’re in the 34% who are ahead of the curve, it’s safe to say they’ll be left behind by consumers who are already well accustomed to buying groceries, clothing and even cars online.

To stay competitive, financial institutions must provide real digital lending. That means consumers must be able to complete the loan application journey entirely online, from whatever combination of desktop, table or smartphone they prefer.


Creating an Exceptional Digital Banking Experience

PricewaterhouseCoopers (PwC) has some advice for lenders who want to create an exceptional digital experience for consumers:

Offer Clear Guidance

Give loan prospects clear guidance about what they’ll need to complete the process and what is needed to secure a loan from you. When you provide a digital loan option and clear instruction, you will likely see increased loan traffic.


Send Clear Communications

Your clients are applying for loans because they have a want or need that’s important to them. They’ll have limited tolerance for waiting. Let your customer know the status of their application at every step in the process. Update them frequently and notify them right away if something is missing. Even better: let them log into your system anytime to check their application status.



The demand for digital loans has exploded during the pandemic. Lenders need to react quickly to develop new processes and communicate them to employees. According to the 2020 Banking Report, digital loans are not merely a replacement for procedures that used to be done by telephone or in-person; they are an entirely new way to attain and retain customers.  


Offer Alternatives

Unless you have to, don’t require your customers to visit a branch. In the online journey, your technical solution should allow them to pick up where they left off without starting over.


Be Prepared

Surprises happen, especially in the technical world. Create policies to address a broad range of unforeseen circumstances and events.


Going Digital Is Easier than You Think

In 2021 and the years to come, lenders must quickly adjust to evolving consumer expectations. It may feel like a daunting task, but the technology and expertise are here, already being used successfully by nearly a third of all financial institutions.

Is ramping up your organization’s digital loan journey on your to-do list for 2021? Would you like to know more about the tools you need to make it happen? Start by taking our free Digital Journey online assessment to learn more. It only takes a few minutes!

Stats, figures, and accumulated numbers/percentages stem from the DIGITAL LENDING AND ACCOUNT OPENING report. Author is Jim Marous.
The Report was Published in September 2020.

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