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?
- Outdated Digital Lending & Online Account Opening Technology
- Outdated Loan & Account Origination Technology
- 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
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XpressAccounts
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Is your financial institution ready to enter the digital age? Find out by taking our digital assessment below:
