Behold! Results are in for the Digital Lending & Account Opening Survey.

Posted by Brooks Huber

The materials available in this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your own advisors with questions regarding the content herein. The opinions expressed in this article are the opinions of the individual author and may not reflect the opinions of MeridianLink, Inc.

Our exhilarating summer webinar series might’ve drawn to a close, however, it certainly went out with a bang! We concluded our sizzling summer coverage with an extra special guest, Jim Marous—owner and CEO of the Digital Banking Report. After scrutinizing, analyzing, and reviewing the 2020 Digital Lending and Account Opening survey, we can safely say this jam-packed and climatic webinar revealed everything we were able to pull from the report, and more!

 

Not only did Jim share insider secrets, he also highlighted important key takeaways about the digital lending journey you really ought to know. Finally, he elaborated on the state of digital lending in today’s marketplace, as well as forecasting what the future holds. You won’t want to miss the results, trust us.

 

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Summer Webinar Series MeridianLink | Jim Marous Digital Lending and Account OPeningIf you have 45 on-demand minutes to spare, we highly encourage you to view the complete webinar. This way you get the full experience. But if you’re scraped for time, we’ve provided a brief synopsis of the webinar’s findings—transcribed and summarized for your reading pleasure!

 

First things first, who exactly was surveyed? The Digital Lending and Account Opening Survey was sent to over 40,000 subscribers within the financial brand, which constitutes a global reach. This effort is meant to truly scope the entire realm of the financial services industry. In fact, the survey was pulled from various sizes of organizations, as well as various types. And out of those 40,000 subscribers, Jim and his team successfully gathered survey results from over 500 global financial institution executives to find out what they believed was changing in digital lending. The findings mostly relate to North America, with a slight global influence. Suffice to say, everyone involved did their due diligence.

 

The survey concluded with a number of interesting findings. The first key takeaway is that loan application alternatives are continuing to expand. This is great news. As the surge in digital demand grows, so do most organization’s desires to meet the demand. The survey data concluded that more banks and credit unions are collectively receiving loan applications from their website and through mobile applications. Larger organizations within the survey showcased an increased growth within their mobile applications, whereas smaller organizations showed a significant growth in their website applications. Most large-scale financial institutions operations are providing a more fluent end-to-end digital experience, including mobile services.

 

However, there exists a key differentiator between applying for a loan digitally and being able to complete the entire process digitally. One key observation is that 71% of organizations state they either have this capability now, or will within a year. This capability is table stakes for the future. Sure, there is growth in end-to-end digital lending, but there is still a lot of room for improvement. Larger organizations are more likely to offer a complete end-to-end experience now—or very soon—whereas many other organizations are hoping to have end-to-end enabled sometime in 2021.

 

There is better news when it comes to checking account opening. From this survey, 72% of respondents reported that their financial institution allows end-to-end digital account opening. And just like online lending, not all the organizations are able to provide a complete digital account opening experience.

 

Now to address the need for speed! The survey also examined the time it takes for a consumer to apply for a loan. Survey results reported that 38% of applications take more than ten minutes to complete! It might seem like an appropriate timeframe, but the consumer demands faster. 55% report a completed loan easily comes in under ten minutes. Thus, it is concluded that a lot of financial institutions do not meet the digital expectations of the consumer. The true challenge is to make sure that all the processes are streamlined and happening as quickly as possible.

 

Around 62% of organizations admitted they require consumers to come into the branch to complete a loan application, simply because they demand a physical signature. This can easily be rectified through the use of third-party software, which seamlessly integrates into digital lending technology. Now, this may have been considered acceptable practice in January of 2020, but in a post-pandemic world, consumers now have to find organizations that can easily accomplish all of their needs—from the comfort and convenience of their home. The key to a successful digital lending strategy is to focus on speed and ease of use. If your application process is lengthy then your organization may be at risk of a high application abandonment rate.

 

Another key takeaway from the survey was application capabilities for both websites and mobile devices. The survey discovered that credit card loans were dominant in this space, unsurprisingly. But what was interesting, commercial loan applications were pretty much nonexistent, thus raising an important issue; how do we make it so that a universal application can handle all of these loans?

 

The digital lending survey also examined the functionalities that were available in each lender's technology. The most offered functionality is eSignature. Individual capabilities within your technology can only take you so far. The priority should be improving the functionality that makes the process faster and also trying to remove the features that are not compatible with a digital world.

 

The data also shows that there is room for improvement when it comes to new customer acquisition, specifically the member onboarding procedures. Once the consumer has opened a checking account, what are the best practices to follow through with? A JD Powers study concluded the ideal number of times to contact a new customer throughout the onboarding process is seven. What is the industry average? 1-4. However, in order to do this successfully and build customer loyalty in the process, there needs to be a dedicated onboarding person. The goal should be to educate the new member or customer on how your organization can personally help them.

 

When drawing a conclusion from the Digital Banking Report, all data and findings lead to one logical conclusion: a digital lending strategy takes work! And rightfully so. The end goal is to make the digital process as easy, straightforward, efficient, and fast as possible. Consumers applying for all of their lending and account needs are looking for those crucial elements. True success can only be achieved through a digital transformation that examines all processes and strives to make them simple.

Watch The Recorded Webinar

Topics: Account Opening System, digital lending

Written by Brooks Huber

Content and Communications Manager, MeridianLink

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