Digitizing Lending – An Impact On Customer Experience

  • Posted by: Deborshi Hazra

Digital lending is not something new. Early traces of it could be found as far back as 1990s along with the emergence of online lenders, the first eMortgage being registered in 2004. Truth is, digital innovation has hit the financial industry just as much as it has any other industry. On a smaller scale, look at borrower portals for example.

But historically, and to a large degree today, the focus on digital lending has often hovered around aspects of digital automation and moving paper processes online. This created a block, because the online experience often followed the same pattern as its offline counterpart, creating redundancies and inefficient processes instead of being optimization-focused.

Things have changed. The importance of user-centric design-thinking has inspired groups of lenders to utilize digital platforms and change digital user experience. This led to the integration of data sources to reduce documentation, personalize pricing, and make the overall process experience more effective. In fact, lenders are now using digital tools to unlock varied forms of customer interactions and services previously unoffered to borrowers. Why You Should Focus on Lending Digitization Rapid digitization in lending opens doors to customer value propositions that move beyond historical limitations or boundaries. Certain lenders have embraced the era of digital transformation in lending by:

1. Restructuring Workflows & Processes

Mundane end-to-end workflows and processes are what encouraged a transition to this new age of digitization in lending. It’s also most ahead in terms of evolution among other innovative initiatives.

There’s still room for significant growth here for lenders to enhance the overall digital user experience with the integration of newer data sources, redefined requirements to lend, and reworked internal and customer workflows for a frictionless lending experience.

2. Digitizing Back-end Operations

Improving the customer journey via digitization is not entirely a front-end process; lenders need to streamline back-end operations just the same. With the digital revolution in full motion, it is imperative to digitize back-end operations to provide consumers a seamless customer experience.

This would imply an active role in re-examining existing structures and systems to make them less siloed. Strategies that involve creating new customer experiences or optimizing customer journeys without completely rewiring the existing IT infrastructure, but an incremental approach to the digital transformation, might be the key to success going forward.

3. Staying Human Through Digitization

Despite the modern age of digital technology, people still value people. Borrowers still seek advice and find immediate access to executives ready to answer their important questions. Of course, this doesn’t always need to imply face-to-face interactions or phone calls.

It’s an opportune moment for those early to adopt; while early digital innovations came across as robotic, interactive co-browsing applications and video chats that offer the same benefits as human interaction serve to enhance the digital user experience.

4. Hyper-Personalization at Scale

Artificial Intelligence now enables lenders to provide personalized suggestions in a cost-effective manner, helping consumers understand options based on individual financial situations.

Consumers actively look for relevant inputs that might either improve their financial health or help them make smarter decisions, causing wellness programs for finance and financial management tools to increase in popularity. On the flipside, digitization is also progressing along the lines of customer acquisition. Smart investments in web analytics and digital marketing now provide lenders with the opportunity to reach customers at an effective stage of their financial journey. It’s a transformative effect that might just make digital lending frictionless from start to end.

But it’s not merely about reducing friction. Digital lending is best optimized when lenders are able to understand and respond to personal needs, provide support through the journey, and add value with inputs that serve to better manage financial health. Expect digital product engineering innovation around AI-powered chatbots, wearables, voice interaction, and more in the coming years. It’s best to stay prepared.

But in conclusion, simply align the adoption of digital innovation to user needs. Your customers are ready to immerse in that experience. Are you ready to provide it?

Author: Deborshi Hazra

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