A streamlined consumer lending experience is a path to originating more loans and increasing speed-to-close, but how do you ensure that your digital applications are truly optimized? Data-driven insights lead the way.
Developing streamlined digital processes is critical to providing positive consumer experiences in the lending industry, but without looking under the hood of your loan origination software, it can be hard to know what is – and isn’t – working.
As branch banking rapidly shifts, increasing remote-accessible online and mobile applications, banks, credit unions, and other lenders need to polish their loan and mortgage origination systems to create an easy, intuitive design and process. Data-driven insights can help to identify key drop-off points in your consumer’s digital journey, helping you to feasibility patch the holes in your funnel for a streamlined and potentially leak-free application experience.
Keep Application Abandonment at Bay
With a growing number of digital natives utilizing banking tools, consumers increasingly expect platform experiences to rival those of Amazon, Instacart, TeleHealth, and other hallmark platforms defining industry standards for experiential design. Clunky graphics, slow-loading pages and small glitches in a platform create friction and could possibly lead to application abandonment. Over time, these small issues compound, and can cause funnel leaks that negatively impact the borrower’s experience and potentially revenue.
“A credit union or bank is paying a lot of money for leads that aren’t making it to the bottom of the funnel,” said Carlo Cardilli, CEO of Alpharank, a best-in-class customer journey mapping and attribution solution for banks and credit unions, and a MeridianLink partner since 2018.
“Imagine that you have this pipe that goes from the street to your house, and this pipe has lots of leaks,” said Cardilli. By the time the water reaches your house, you could be left with only a trickle. On their own, each issue that customers have with the digital experience may seem insignificant but, when combined, add up to applicant abandonment. This also leads to an increasingly high cost per lead that will have your executive team wondering where the ROI of your lead generation programs is and what should be cut. This often reduces the number of loan applicant leads, sales and could start costing people their job.
To fix the pipe, you have to start digging.
Dig into Process Data to Find the Friction
In a digital world, every click matters. Understanding the behavior of your consumers starts with mapping their digital footprints, allowing you to pinpoint the exact moment they abandon an application. Analyzing this process data not only shows areas of opportunity but also a clear path to improving the consumer loan application experience.
Matching the universal consumer experience (thanks, Amazon) means removing unnecessary, intervening pages and steps within an application, eliminating confusing or unclear language, maintaining a responsive, fast platform, and leveraging technology to smooth the consumer experience.
As institutions fix these “leaks,” abandonment rates are likely to improve; an increase in completed loan applicants is typical in just the first round of improvements, said Cardilli, and it’s not unusual for clients of MeridianLink and Alpharank to see improvement rates in general.
“You have to start somewhere, and you have to let the data speak,” said Cardilli.
Many friction-causing application pain points surround ease-of-use. The more seamless the application, the fewer the leaks. Here are a few things to look for when digging through your data:
- PDF forms or downloadable documents complicate and slow the application process
- Scanned – versus electronic – signatures and ID verification require time and effort
- Long and tedious forms are time-consuming and result in a poor mobile experience
- Slow load times and clunky graphics hinder a streamlined consumer experience
Best Practices for Reducing Application Abandonment
When it comes to reducing abandonment, it’s all about the user experience, explains Richard Skelton, MeridianLink’s Group Product Manager of Digital Lending.
“In the end, it’s about making things as easy as possible for lenders and borrowers,” said Skelton. Focusing on prefilled or prepopulated fields, for example, as well as scan-to-field data entry and mobile accessibility, is central to removing friction from the application.
“What we’ve seen over the past year with the COVID pandemic shows the importance of an omnichannel experience,” he said. “Providing conversions beyond the desktop and adding mobile as an access point to loan applications.”
Once seen as an accessory, mobile applications are now a necessity for financial institutions seeking increasing application completion, said Skelton. This means supporting the digital lending process with an application portal tool that empowers financial institutions to streamline their application experience.
“It’s really about ensuring that your provider can address customizations and optimization tools for improving loan submission times while providing flexibility and ways to customize the experience.”
“We’re looking to solve client challenges by increasing the seamlessness between their banking websites and end users,” Skelton said, noting that often the customization of applications can raise loan submission rates simply due to faster submission times. Skelton recommends keeping the application to under 5 minutes with an option to complete the application later.
Another time saver? The ability to access third-party databases to pull customer information from disparate sources can reduce the time it takes to complete the application. You should be utilizing a platform that will streamline both the back-end and customer-facing experiences.
A Solution for Minimizing Loan Origination Application Abandonment
With MeridianLink® Portal, lending institutions of all sizes can get more out of their online platforms, customize the look and feel of each application, and ensure a consistent, frictionless, and leak-free experience across all popular devices and browsers.
MeridianLink Portal seamlessly integrates with an all-in-one platform to consolidate application processes into a single, secure repository. With the technology to customize the application experience, organizations can streamline online applications to reduce risks of abandonment.
With decades of industry experience, the MeridianLink team can assist in finding and implementing the right software for your organization. Contact us to learn more about MeridianLink Portal and other industry-leading digital lending, deposit account opening, collections, and loan analytics solutions.
