Bank services and processes have been largely digitized. These days, it’s not even necessary for a bank’s customers to visit a branch. Yet one service on which many banks can still modernize and improve upon is their lending operations. The end-to-end journey of a loan, from application to approval to servicing to final payment, often isn’t well-integrated. This is often the result of antiquated systems and software, which are inefficient and often create data silos.
In order to provide consumers with the best experience, banks need to improve their efficiency when it comes to lending. Many banks’ loan departments are stuck with legacy systems and software that puts them at a disadvantage when compared to the cutting-edge loan origination systems and loan servicing software now available to lenders.
Often, the best solution is a modern, fully-integrated, cloud-based lending platform that supports the entire end-to-end loan lifecycle. Let’s look at how an integrated lending platform can improve every phase of the digital lending customer journey.
Step 1: Loan or Lease Origination
A digitized loan or lease origination process should provide convenience, capture all required information via a cloud-based system for online application, and set the foundation for a completely digital lending customer journey.
| Capabilities | Bank Benefits | Customer Benefits |
| Digital loan applications | Acquires loan or lease opportunities from consumers already accustomed to a digital commerce experience. | Provides convenience of anytime, anywhere applications. |
| Digital document capture | Eliminates delays and costs associated with paper documents. Supports a completely digital loan or lease origination process with rapid application review and decisions. | Simplifies origination process. |
Step 2: Loan or Lease Decisioning
With all applicant information captured in a digital format, extensive automation and pre-integrated cloud-based information sources allow banks to rapidly respond to loan or lease requests based on a more accurate assessment of an applicant’s financial strength.
| Capabilities | Bank Benefits | Customer Benefits |
| Workflows, decision rules, and auto structuring | Eliminates manual tasks that delay decisions. Increases the chances of capturing opportunities through rapid response times. Maintains compliance by consistently applying credit policies and decision-making criteria. | Enables rapid approvals (often in a matter of seconds) for applicants with good credit. Provides competitive credit terms based on accurate and current assessments of the applicant’s financial standing. |
| Fraud analytics | Identifies applications that use false information to increase the chance of obtaining credit. Spots applications with high default probability. | Indirectly benefits customers by reducing fraudulent applications that lead to defaults and increased lending costs. |
| Alternative credit data | Provides a more accurate assessment of the consumer’s financial standing. Captures more lending opportunities from consumers with no or thin credit history. | Improves the chance of applicants with limited credit history to obtain financing. More accurately reflects creditworthiness to obtain better loan terms. |
| Trended credit data | Uses recent credit card payment trends to more accurately calculate lending risk. | Provides applicants who demonstrate the ability to make monthly payments with more competitive terms. |
Step 3: Loan or Lease Acceptance
The efficiency of the digital lending customer journey shouldn’t be interrupted by paper processes that delay decisions and add to the lending process’ expenses.
| Capabilities | Bank Benefits | Customer Benefits |
| E-contracts and E-signatures | Responds to offers without paper or postal delays. Maintains a complete digital record of the agreement. | Accelerates the lending process and makes reviewing lending terms more convenient. |
Step 4: Online Servicing
A completely digital loan or lease origination process provides all the information needed to support digital servicing, allowing borrowers to easily access loan or lease information and banks to reduce customer service costs.
| Capabilities | Bank Benefits | Customer Benefits |
| Online self-service | Reduces service center call volume. Lowers customer support costs. Allows customer care representatives to focus on inquiries that genuinely require human interaction and expertise. | Permits access to information regarding account status, payment history, and payoff amounts at any time and from any place with an internet connection. It also enables customers to set up automatic payments and make one-time payments. |
Meeting Expectations With a Completely Digital Lending Customer Journey
Today’s consumers have come to expect a digital experience throughout the entire lending journey—from loan or lease submission to final payment. Modern cloud-based lending platforms allow banks to meet their customers’ expectations in a way that accelerates loan or lease decision-making, reduces lending risk, and increases lending opportunities.
Getting Started
defi SOLUTIONS offers a total solution that improves the digital lending customer journey through a lender’s complete loan or lease lifecycle. Partnering with captives, banks, credit unions, and finance companies, defi’s market-leading solution helps lenders exceed borrower expectations. From digital engagement through the complete lending process, defi sets new standards for flexibility, configurability, and scalability in originations and servicing (by your experts or ours). defi SOLUTIONS has the backing of Warburg Pincus, Bain Capital Ventures, and Fiserv. For more information, please visit www.defisolutions.com.
