Banking leaders who are The drive for banking leaders to build for the future must be balanced with the difficult task of handling ever-changing customer demands on a day-to-day basis, according to The Future of Digital Lending report, sponsored by MeridianLink and authored by Jim Marous, owner and publisher of the Digital Banking Report.
As an example, three years ago, Bain & Company asked some 1,200 business leaders what digital leadership entailed. Most were focused on speed: in decision making and getting offerings to market.
Speed No Longer Enough
Today, business executives realize that speed must be accompanied by an effort to scale their initiatives business-wide, according to the Bain article summarizing the results of its annual survey.
Digital disrupters, such as Amazon and Tesla, have the advantage over traditional organizations because they were built for digital. The Bain article notes:
"Not only is their underlying tech infrastructure tailored specifically to their digital ambition but so is the way they operate, how they make decisions, and the way they use technology in their everyday approach to business."
While many lending institutions have done well with implementing new digital capabilities, such as enhanced digital consumer loan and mortgage applications, most banks and credit unions have been hampered by outdated systems, fragmented processes, siloed data, and other issues that slowed their transformations to digital, according to The Future of Digital Lending.
Things have become more difficult for traditional lending institutions who are now rethinking how and where work is done, as well as who does it.
In fact, 72% of respondents identified the ability of “people to adapt, reskill, and assume new roles” as key factors in navigating future disruptions, according to the 2021 Deloitte Global Human Capital Trends survey.
To succeed with their digital transformation initiatives, most lenders will have to team up with fintechs and third-party solution providers to transform their legacy loan origination processes. The key will be how well they're able to focus their efforts and how efficiently they can execute on their plans.
Five Digital Transformation Focus Areas
The following are five key areas of focus for lenders executing digital transformation initiatives, according to Deloitte.
- Adopt a hybrid workforce. Implementing a hybrid or virtual-first workforce lets companies determine when physical engagement is optional and when it's necessary. This will also help organizations determine the technologies and workflow needed to support a hybrid workforce.
- Migrate to the cloud. Moving to the cloud can help operations become more agile while enabling greater standardization, automation, and scalability. "The full value of the cloud is not only efficiency — it’s about amplifying innovation and flexibility as well," according to Deloitte.
- Automate decision-making where possible. Automating processes that are repetitive, high volume, and require little interaction from employees will allow those workers to focus on improving customer interactions, developing and using innovative technologies, making the organization more competitive.
- Amplify innovation. By taking advantage of cloud capabilities and increased automation, organizations can use data and analytics to advance their research and development efforts. These technologies allow the entire organization to participate in the innovation process.
- Become a digital lending transformation leader. Financial institutions that aim to become digital lending transformation leaders can positively affect their solution providers and partners as well as the rest of their organizations to speed change.
"Effective execution will require data and analytics as a foundation as well as the leadership, talent, and partnerships that embrace change, are willing to take risks and will disrupt themselves for a digital future," according to The Future of Digital Lending report.
Although it was disruptive, the pandemic created opportunities, remove obstacles to success, and offered a vision for what banks and credit unions can accomplish when they embrace digital lending.
Download the Future of Digital Lending Report
As sponsor of the publication, MeridianLink is making a limited number of the Digital Banking Report available on a complimentary basis (a $495 value) – click here for your copy.
To learn more about how MeridianLink mortgage and consumer loan origination software (LOS) can drive your banking and credit union digital transformation efforts forward, contact one of our digital lending experts today.