The evolution of digital banking has spawned a lot of systems, including point-of-sale (POS), account opening, loan origination systems (LOS), customer relationship management (CRM), collection software, core systems, and more.
When these systems work independently of one another in separate departments, they create silos that squander opportunities for genuine digital transformation in loan origination and other workflows. With COVID-19 shuttering bank branches around the nation, lending institutions without digital lending options have been left behind, while their competitors reap the benefit of uninterrupted loan origination.
While the pandemic will pass, digital lending is here to stay. Taking advantage of the efficiency that digital lending provides, however, means dismantling your silos or risk going the way of K-Mart, Sears and Montgomery Ward. Digital streamlining without having to replace all of your current systems? That’s the real win.
Lending with Branches Closed
Before the pandemic, financial institutions could get away with siloed technology built to fit their existing infrastructures, budgets, and corporate strategies. While many people liked the convenience mobile banking provided, it didn’t necessarily create a digital lending transformation.
Then the pandemic hit. Everyone had to conduct their financial transactions without visiting a branch office, whether they liked it or not. This overnight dependency on online and mobile financial services exposed the traditional, in-person, paper-based lending process as an Achilles heel.
Give Them What They Want, When They Want It
When the pandemic brought many kinds of business to a stop, lending institutions that implemented digital lending thrived, while others that did not implement any digital solutions remain stuck, waiting for things to “get back to normal.”
Similarly, eCommerce has boomed, while those brands and retailers without an online store have suffered. Although brick-and-mortar retail will be back, consumers have become accustomed to buying whatever they want, whenever they want it – from the comfort of their home. And with even grandparents doing it, it isn’t a habit that can be chalked up to a generational thing.
“Going digital” opens up additional opportunities. Amazon’s grocery app, for example, not only gets you everything you need, but also makes use of analytics and the ability to think around corners: If your cart is full of vegetables, it might suggest a low-calorie dessert. Based on your cart, it will recommend items that people with similar eating patterns also like. It can analyze ingredients that commonly go together—along with your past shopping history— to suggest items you may have forgotten.
Another aspect of Amazon’s digital success is automated, start-to-finish communication. Placing an order generates no fewer than eight alerts along the way, from order confirmations to substitution options, delivery notifications and requests for feedback. At no point in the transaction is the customer left to wonder if an order has been lost or delayed.
Digital Lending
Can your members or customers apply for a loan or mortgage online, safely submit sensitive documentation, send and receive communications, receive updates, and receive funds from home?
As consumers become accustomed to personalized, online experiences, the shortfalls in traditional lending become unacceptable to them. To remain relevant and competitive, lending institutions must eliminate silos that stymie digital lending and utilize technology that gives borrowers what they want, when they want it.
Digital lending lets prospective borrowers see how low their interest rate could be if they refinance their home or how much money they could save on their monthly payment. Consumers can also figure out if they can afford that car they want – as fast as they can enter their information.
Human Interaction When They Want It
While digital lending can automate the entire process, there will be those who still want to talk to someone. This is where lending institutions tend to have an advantage over some online retailer giants. Whether it’s a live chat online, a telephone conversation or a visit to the local branch, it’s nice to know that someone is available when there are questions or an application is rejected.
Digitally Enable Your Lending Process
MeridianLink Consumer (formerly known as LoansPQ) and MeridianLink Mortgage (formerly known as LendingQB) make digital lending less complicated. With established integrations with hundreds of partners and their open APIs, the software integrates with just about any system you use to streamline the lending and mortgage origination processes.
