To be a digital lender, banks and credit unions must do more than provide a digital app. Internal lending processes must be transformed to eliminate friction and unneeded steps, with advanced analytics supporting proactive loan decisions.
A great deal of discussion has surrounded the importance of building a seamless digital account opening process. As found in the Digital Banking Report, Digital Account Opening and Onboarding, progress is beginning to be made, as more organizations are allowing consumers to open new checking accounts online and on a mobile device. With the exception of a very few progressive banks and forward-thinking fintech firms, however, not nearly as much progress has been made in digital lending.
To date, the focus of most digital investments in lending have been to improve the customer-facing digital output, with significantly less attention placed on digitizing the back office. While some of the resulting changes may improve the customer experience in the short-term, these mostly cosmetic changes are easily replicated, and don’t necessarily improve the overall customer experience.
Having a digital application is not enough. According to PwC, a financial organization must initially define what is desired from both a customer experience and operational efficiency basis around consumer lending. Next, banks and credit unions must build a digital lending strategy around the following organizational competencies. The path to becoming a true digital lending organization involves five steps.
