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CRIF Lending Solutions Blog

Expert Insight. Forward thinking. Trusted perspective.

Ask the Experts: Handling the Digital Evolution of Loan Software (Part 1)

Taking advantage of the evolving digital marketplace requires a whole lot more than just incorporating an application on your website. Today’s financial institutions aiming to stay ahead of the curve and meet consumer demand for speed and convenience need a frictionless culture to their online loan application process. They also need to connect the digital front ends to back-end processing. The most successful lenders also look to create a digital culture change for their branches and throughout the entire organization.

Last week, experts from our ACTion loan origination team participated in a webinar that detailed trends and best practices for capitalizing on the shift to a more digital marketplace. Here are some of the questions our experts fielded following the presentation:

Q: How can [we] educate chief information officers and old-school finance heads about new technical challenges and concepts like what is an API?

A: That’s a good question. We’ve seen technology evolve tremendously over the years, and culture is a big part of it. Getting your senior and executive management team on board with this is definitely a challenge in some cases. From our perspective, when we get involved with sales and RFP processes, we spend time educating them on trends in the industry because you have to take a step back and look at the platform to see how you’re going to have a great digital strategy. It starts with the platform, itself, and we reference several good publications out there. The Financial Brand is a good blog, and it publishes stuff almost daily on trends and sometimes includes surveys of banks and credit unions asking them about what’s happening. Javelin is another good source. I would suggest getting data from some of those industry analysts as a first step.

Q: Do you see pushback on adopting a new customer experience as opposed to digitizing the current or old customer experience?

A: I think it’s an evolutionary thing. You’re going to have to have a culture and a process. You’re likely not going to hit it perfectly the first time you deploy the new version of your online loan app or your online deposit app, for example. It’s something that you’re going to have to tweak, especially at the beginning of the process. Working with your vendor to have analytics on abandonment is important. So if you see people dropping off at certain steps of the process, you can evaluate it every month or quarter to decide if something needs to be tweaked or eliminated. There are a lot of best practices regarding this that we share with clients in terms of enticing someone to finish the application by inserting a status bar that shows where they are in the process and making the wording friendlier. In general, when I look at clients with more of a legacy-type of online process changing to new, volume pretty much goes up dramatically across the board. If you decide to implement something more modern and user-friendly in place, I think you’re going to see success and that channel will grow. In the end, it will pay for the small investment you made for that particular channel.

Q: With the online channels emerging more and more, when you expect regulations such as TILA, ECOA, UDAAP and others to catch up?

A: With regulation, even if it’s in the online process, you’re still really leveraging the loan origination system. It doesn’t matter if they’re applying online or walking into a branch, knowing your customer is important and making sure you have databases behind the scene to verify things such as identification is important. But as far as regulations for a more sophisticated loan like a HELOC, it’s critical to make sure [regulations are implemented] behind the scenes by the loan software as well as that it’s creating the correct disclosures and pushing them out via the online process or email. That’s what our platforms do. They push the correct disclosures at the right time. Reporting is also an important part of that to ensure that you can easily spot and correct anything out of bounds regarding your policy.

Financial institutions continue to adapt their operations and technology to capitalize on our industry’s evolving digital landscape. In case you missed last week’s webinar, click here to access the recording.

CRIF ACTion⁺ is the industry’s only HTML5-formatted loan origination system that offers both responsive design for applications on any mobile device, but also back-end processing from those same types of devices. For more information on all of the functionality and user-friendly interface offered by ACTion⁺, please click the button below to request our updated brochure.

Request a Copy of Our ACTion Brochure

Click here to read Part 2 of this two-part blog.

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