How lenders can deliver cash quickly, simply, and personally.
Taking out a loan is a sensitive issue. Borrowers are often excited about what the money will allow them to do—study, buy a home for their growing family, or maybe finance their first new car. But they’re also mindful that it will need to be paid off. A good customer experience (CX) is important if borrowers are going to hold onto the good feeling, make their payments on time and in full, and come back for different products in the future. But good CX isn’t all altruism. It also has benefits for the lender, like reducing the cost of dealing with customers, lowering the cost of acquiring new customers, and holding onto the customers you already have. All of those things are bottom-line critical.
Here are five key steps we think lenders can take to deliver exceptional CX and drive their own commercial success.
Borrowers now expect retail-quality digital interactions with lenders. You need digitally-led technology, a lot of it, and it needs to be really good. “It’s got to be simple for the customer and your employees to use, it’s got to be able to deliver an element of personalization for the customer, they need to understand more or less how it works, and it has to be super-secure,” says Ian Nelson, Managing Director at Q2, EMEA. Everything you build has to function on those principles.
Simply throwing technology at the lending process is not enough. Lending is sensitive and complex - you have to apply tech judiciously. Technology use needs to be seen in light of CX – and design thinking also must be applied. “The most successful lenders are going to consider where to apply tech first, and which products need tech at which stage, in which form. You have to be clever about it,” says Matt Taylor, Senior Solutions Consultant at Q2, EMEA. For example, customers expect auto loans to be quick. How can you use tech to deliver the speed they need? Student loans are typically for the younger generation, so the tech you use has to be super-interactive. “The way you apply technology to solve problems should be strategic,” says Taylor.
Once you’ve decided on the digital technology to deliver CX, you need to think in detail about how to bring an optimal lending process. One configured for seamlessness. “Customer experience matters from first contact to last payment,” says Mukul Mittal, VP of product at Q2, “you need to consider how you’re going to apply digital technology end-to-end throughout the process, to ease bottlenecks, solve pain points, and even create unique experiences for the customer.” Some solutions like e-signing, and text reminders are simple to integrate, while others will take more time and effort - but lenders should remember that seamlessness matters. The solutions must work together.
Personalisation is going to define the future of banking. And a one-size-fits-all approach doesn’t cut it anymore. Technology you apply as part of your lending process needs to allow for flexibility on things like loan terms or repayment schedules because each borrower has not only their own requisites but risk profile. “You will probably need to partner with an expert to help you deliver personalisation without exceeding your risk appetite,” says Taylor Adkins, VP of Product Management at Q2, “but technology today allows you to understand a lot more about your customer, and it also allows you to set your own internal parameters and limits for lending.”
A thoughtful digital lender leverages their new seamless solutions to deliver even better in-person CX. “The tech shouldn’t replace your people—it should free them up,” says Phil Swift, Senior Relationship Manager at Q2, EMEA. “Your relationship managers are experts who can help borrowers with complex issues—even down to advising them on how to become creditworthy enough to get a loan in the first place.”
No matter what challenges may come, CX must be at the heart of your digital strategy. A great borrower experience is your north star—it will always lead your lending business in the right direction.
These tips will help as you consider digital lending transformation and what may lay ahead.
Learn more about Q2 and our approach to digital lending by visiting our Beyond Transformation web site.