Other parts of this series:
- 6 key success factors for credit innovation
- The first key success factor to break-through credit innovation: Improving data quality
- Reshaping customer experience: A necessary step towards credit innovation in digital lending
- Streamlining the instant loan process: A key element for credit innovation in digital lending
As explored in my previous posts, traditional banking players have to deal with a competitive arena composed of disruptive “native digital” players who can deliver a higher level of customer experience, less time between steps and lower costs.
In this context, digitalization is a key element for the increase of overall process, system efficiency and accuracy (increase of loans granted, decrease of disbursement time), reduction of cost, and providing a fully integrated customer experience throughout the loan lifecycle.
Many traditional players are moving in that direction, focusing on the origination process with the aim of reducing client touchpoints to one (in line with what some digital lenders have already achieved) and decreasing the “time to yes”, the time for documents preparation, and the “time to cash”.
Today I want to share with you a key element for digitalization of the origination process: focusing on streamlining instant payments.
Standard roles and responsibilities
The first step in enabling streamlining of the internal process is defining and adopting a standard model of roles and responsibilities across different channels—implementing a single set of procedures, which ensures a higher level of regulatory compliance.
In my previous post I observed that making procedures more customer–centric is considered critical by many banking players. It is very important to provide a consistent customer experience across all transactions, through friendly interfaces (e.g. in the selection of products tailored to customers, digital signature to simplify contract finalization, standardized customer educational materials to aid in navigation through the process, etc.)
“Time to yes” and “time to disbursement”
The automated upload of origination documents and definition of pre-approved loans enable an instant “time to yes” for some customers, letting them know immediately if they can access the loan with a very limited “time to disbursement”, only 1-3 days for cash availability.
The provision of an internal rating model using a pre-scoring model with a “light” rating and real-time scoring with a “completed” rating can ensure very limited process lead times.
Another important factor in simplification is eliminating the need for uploads where possible. For example, pre-approved customers or customers applying for a very small loan could skip this step.
That’s our look at streamlining the instant loan process. In my next post, I will guide you through another important factor: digital mortgage. Stay tuned!