The consumer lending landscape has moved inextricably toward online, digital loan processes. For regional and community banks and credit unions, this represents a problematic shift.
Launching a digital lending platform is one thing. It’s a huge project, but there are enough proofs of concept out there to get something off the ground relatively efficiently. What’s more, you can kind of finagle an online lending presence through clerical resources, such as basic applications that gather user data, online, while your backend processes remain the same.
The digital lending challenge
The real problem comes when it’s time to deepen your digital lending footprint and sustain innovation beyond the initial rollout. And that time has come.
According to McKinsey, a bank with a $250 billion balance sheet could create $230 million annually in profits that come from the efficiencies and revenue gains associated with a responsive, modern digital lending program. You may not operate at that scale, but the situation is simple. McKinsey found that consumers are looking to get lending processes down from taking days or weeks into taking hours or a couple of days at most. If you can keep up, you can glean huge results. If you can’t, you may struggle to reach today’s borrowers.
“It’s time to deepen your digital lending footprint and sustain innovation beyond the initial rollout.”
What’s more, this trend isn’t just happening in retail banking. A Capgemini study found that commercial borrowers are somewhat more willing to deal with traditional lending processes, but are quickly embracing digital transformation and seeking strong web and mobile experiences from lenders.
Developing a robust online lending service is about much more than user-facing application tools that gather data. It requires a transformation of back office processes and procedures so your entire team can function at a digital pace. For this, you’ll need to embrace risk analytics technologies.
Sustaining innovation with risk analytics
Modern risk analytics platforms let you take data from diverse sources and deliver it to users in strategic, relevant ways. When a loan application comes in, a platform can:
- Dive into user data to provide identity verification.
- Analyze information from third-party databases to identify positive and negative patterns.
- Create a custom credit score based on your internal scorecard.
- Automate application processing procedures to eliminate bottlenecks.
All of these capabilities add up to help your team keep pace with the needs of a deeper, more robust online lending service that meets the demands of today’s customers. Instead of simply launching an online lending system and sitting back, hoping it keeps your customers happy, you can use risk analytics to transform around digital capabilities and sustain online lending growth.
What’s more, industry leaders like GDS Link are making analytics accessible to smaller banks and credit unions. You don’t have to be an industry giant to afford a solution because the software is modular and can be hosted in diverse environments.
As such, industry-leading technologies are accessible to you so you can create a cohesive digital lending roadmap that sets a foundation for consistent growth and execute on that plan by gradually growing your technology footprint as revenue growth and cost savings start to add up.