Implementing and optimizing a digital lending process goes far beyond selecting the best loan origination system. In fact, today’s most successful digital operations surpass the lending aspect and involve some degree of a culture change. At first, that can sound intimidating for financial institutions that are just starting the journey, but there’s fortunately a wealth of insight and information available to steer you down the right path.
Due to widespread industry interest in perfecting the consumer’s digital experience, we’ve dedicated several blog posts in recent months offering tips to help facilitate the transition. Here are three more best practices every financial institution should consider when evaluating whether its loan software and deposit account opening technology can support digital growth:
- Optimizing back-end workflow (Continuous improvement process via consulting and analytics): 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 what needs to be done. 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 loan 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.
Want to learn more about best practices that will help your financial institution improve its digital lending presence? Special guest Jim Marous, owner and publisher of the Digital Banking Report, joined us recently for a complimentary webinar where we discussed best practices that institutions of any size can adopt as well as results of the 2018 Digital Lending Survey, which examined the global state of digital lending and was conducted earlier this year.
To request a free link to the webinar recording, please click the button below.
Photo Credit: troy_williams