Posted by MeridianLink | September 8, 2020

COVID-19 Exposed Digital Lending Limitations for Financial Institutions

With so many financial challenges associated with COVID-19, one that stands out among the list is how companies needed to dramatically shift and re-evaluate ways they operate their business. For example: entering a digital marketplace to meet the demand of consumers. A notion that’s overwhelming for any industry—financial institutions included.

As more and more financial institutions look to invest in a digital future, finding a true digital lending and/or online account origination platform is a crucial element for success. With the right software, and a partner to get you up and running, going digital will enable your organization to thrive and remain competitive. At the same time, it’ll eliminate inefficiencies that would otherwise plague your perceived success. So, what perceivable limitations can you avoid?

  1. Outdated Digital Lending & Online Account Opening Technology
  2. Outdated Loan & Account Origination Technology
  3. Lack of Data for Your Financial Institution 

To learn more about these inefficiencies and our proposed solutions, read the entire blog post below.  

Being smaller than bigger corporate banks, regional banks have, in the past, relied on a convenient location and an undersaturated market to sustain and grow out their business. They were able to find significant growth because of this—ultimately benefitting their numbers and providing opportunities for the communities they served. Including ways people could walk in and receive a loan. That’s just the thing, walking into a bank. Regional banks are now having to rethink their strategies to acquire new customers.

One feasible solution regional banks can utilize to remain competitive is to upgrade/update their services. As technology expands its reach, and continues to help provide services for banks and financial institutions, so too are the number of digital players emerging in the financial industry. This correlation has caused the entire banking world to shift and delve deeper into joining the digital fray. Even some of the most remotely located banks can earn a competitive advantage with a full offering of digital services.

Prior to the pandemic, many banks were (and some still are) hesitant about making a prominent move toward digital lending and online account opening. A handful of organizations have made partial investments toward digital efforts in the hope that they can attract consumers with loan or account opening inquiries but offering consumers only half of the services isn’t enough. Now more than ever it’s imperative financial institutions fully grasp the concept of having a complete digital experience. And starting on the right foot is key.

COVID-19 exposed many digital inefficiencies within the banking industry. These digital lending limitations were especially evident for small business customers who were looking to apply for a PPP loan earlier this summer. Most small businesses were in dire need of this loan, and every day that was ticking away made it more and more stressful to acquire it. Most financial institutions weren’t capable of providing this service. The lack of digital applications for PPP loans caused many customers to rethink their loyalty to their financial institution. Ultimately, many small business owners had no choice but to take their business to a financial institution that was properly aligned to handle their needs.

The COVID-19 pandemic has also exposed limitations within:

Digital Lending and Online Account Origination Technology

Also known as a point-of-sale solution, the pandemic has exposed the limitations of outdated digital lending and online account application software. Or, to put it in another perspective, it has shown banks how vital point-of-sale software truly is. Many banks have opted in for partial digital lending by allowing online consumers to start an application online and ultimately require them to visit a branch to complete the origination of the loan or deposit account. This approach may have worked in the past, but considering time management plays a crucial element to the process, and minimizing human contact is a priority, borrowers can simply do a quick Google search and move on to another more tech savvy bank.

Banks should take this opportunity to learn more about the true digital needs of their customers and invest in technology that will sustainably help them meet their business goals.

Outdated Loan Origination and Account Opening Technology

Many banks have also experienced the magnification of loan and account origination system inefficiencies. Now more than ever financial institutions have to decrease their operation costs and many have to reallocate budget to the expansion of digital lending and online account technology. Outdated lending and account opening systems make it impossible to create process improvement and streamline workflows that can free up time and budget throughout the organization.

Additionally, an outdated loan and account origination system typically will not integrate to a modern point-of-sale solution. This can result in multiple workflows, a lack of synergy within the organization, and double the work for your back-end staff.

Lack of Data

Within the digital age there are many perks associated with relevant technology practices; one in particular is being able to easily access data. Digital lending technology provides in-depth data on each consumer, transaction, loan, and more. This data is paramount when looking to scale your organization, providing cross-selling opportunities for the business. Data gives banks the ability to understand their customers on a more granular level so that they can pivot their business to meet their customers needs. Additionally, data will allow your organization to make evidence-based decisions that help grow your business. Data backed decisions are reproducible, ensuring success is not a stroke of luck, and can be repeated.

MeridianLink’s Solutions

Application Portal

Application Portal allows banks and credit unions, regardless of their size, to easily expand existing lending and deposit account origination to the online consumer. This solution grants the institution control of the entire online application experience. We give each ml_application_portal_ds-1 bank the ability to determine which loan and deposit account applications they want to make available online and the ability to customize the look and feel to match their existing web presence. Application Portal has hundreds of configurations available to help tailor your online application process to meet your business objectives. Additionally, this point-of-sale system seamlessly integrates with our loan and account originations technology, ensuring the reduction of operational costs and increased revenue. Learn more about this solution here.


LoansPQ loan origination system is the industry’s leading loan origination software, providing a full mc_loanspq_video_final-thumb-2 loan product suite to banks and credit unions. As a single loan origination system, LoansPQ consolidates and streamlines applications from all channels, applying the same rules and processes to ensure a streamlined process for bank and credit union staff and world-class consumer experience for members and customers.

Many top financial institutions use LoansPQ as their loan origination system to ensure a frictionless experience by easily consolidating data from all existing channels—mobile, online, branch, call center, indirect, retail, and kiosk—into a single origination point. Learn more about this solution here.


Learn XpressAccounts is the industry-trusted account opening and deposit software platform that mc_xpressaccounts_video_final-thumb consolidates deposit account opening and funding for all channels and financial product types. XpressAccounts account opening software unifies deposit account opening and funding for all channels and product types. With robust functionality ranging from identity verification, OFAC checks, e-signature, switch kits, and core system connectivity, XpressAccounts saves operational costs and increases customer/member satisfaction from application initiation to account creation. Seamless integration with LoansPQ and Application Portal allows for deepening member and customer relationships through a mobile-first digital experience and cross-selling capabilities.Learn more about this solution here.

Is your financial institution ready to enter the digital age? Find out by taking our digital assessment below: 

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