It’s been a few weeks since we’ve focused on digital lending best practices, but it continues to be such a hot topic these days. Here’s a link to where we left off in case you wanted to check it out. Moving forward, here are three more key considerations every financial institution’s loan origination system must incorporate to maximize success in the digital segment:
- Optimizing Back-end Workflow (Continuous Improvement with Analytics and Consulting): When the work is done with a new loan or account and you begin to service that product, decision quality testing begins. Accounts or loans that are charged off challenge your policy for pricing and decisioning. They will sometimes give you the impetus to adjust, as long as you know what to needs to be done.
However, sometimes it is hard to see the forest through the trees. Portfolios are large and analyzing trends can be difficult and time consuming. On top of that, uncovering why something occurred does not always clearly dictate future needs.
This is also true with general process improvements that are geared toward saving time and money. Having a provider that can help you understand your data and make strategic decisions is critical. Understanding both statistical analysis and system integration specific to your platforms is paramount.
- Untethered Workspace: Have you ever felt like your software vendor doesn’t understand your needs? So often, platforms are designed best for meeting the needs of existing clients while you are set up with rigidly defined workflows and very little ability to venture away from desks to complete tasks. While desks are traditional, sometimes informal settings like sitting on a couch are more welcoming.
Branches are still necessary, but sometimes eliminating counters, lines and desks to be where it’s most convenient for the consumer will win you more business. Having the ability to work applications in any environment improves everyone’s experience. Consumers find the application process to be more personal. On the other side of the coin your work is completed quicker and consumer relationships are strengthened.
- Automated Employment Verification: In today’s financial climate, fraud is a constant threat. Even in cases where the consumer is not intentionally misrepresenting information, there are times when decisions are based on application data that ends up being inaccurate. With that in mind, it is incumbent on your financial institution to ensure that you are diligent in validating the information provided by your applicants.
Income verification is the most common stipulation to prevent an automated decision. Historically, verifying income was a manual process that required copies of pay stubs or tax returns. Until recently, there were not many verification options that allowed direct access to employment information.
However, that is no longer the case. Make sure that your origination system integrates an income verification database for instant checks that verify both employment status and income. This will save you time and improve your overall capture rate.
For those of you who joined us at our recent User Forum, you’ll remember that Jim Marous was our keynote speaker and touched on many of the digital lending best practices we’ve outlined over the past several weeks. If you couldn’t make it to the Forum, Jim is the owner and publisher of the Digital Banking Report and was named one of the most influential people in banking and one of the five best fintech influencers to follow.
He will be our special guest for next week’s complimentary webinar (2 p.m. ET on Wednesday, June 12), which we invite everyone to join. Following his insightful presentation at the Forum, this webinar will share the results of the 2019 Digital Lending Survey, which examined the global state of digital lending and was conducted in April.
- Defining digital maturity of the banking industry regarding online and mobile consumer lending
- Effectiveness of financial institutions to provide an end-to-end digital lending solution
- Steps of the consumer lending process that create friction
- How to eliminate friction
- The role of third-party providers in developing a digital lending solution
- The digital onboarding process
- Keys to success in digital lending
If you’d like to register for this informative webinar, please click the button below.
