Leveraging Digital Lending System to Embrace the Changing Customer Experience Paradigm

Lending has always been the cornerstone of banking. Moreover lending products offer a significant and differentiating feature for banks to sustain a win-win, long lasting relationships with customers.

In the current era, retaining customers is increasingly becoming challenging. Banks need to focus on developing a lending system that not only improves the bottom line but also helps to connect and build longstanding relationships with customers. Banks need to match up to customer needs in the product differentiation as well as in processing timelines and flexible servicing capability. To this end, banks need to leverage the leading-edge lending systems that are capable in delivering superior customer experience and in the process enable them to capture retail market share.

The proliferation of digital technologies offers customers wider reach and a distinct ability to choose from multiple channels just by a click of a button. Today, the increasingly connected customer is expects a real-time, personalized and tailored products aligned to his comfort and convenience needs. In addition, the entry of non-banking entities adopting the technology advancements with light operating model and minimal regulatory burden are rewriting the traditional business models of banks. In light of these developments, banks still hold an edge as banking is all about trust. On this aspect, Banks have superior advantage in winning customer trust than non-banking companies. In this digitally connected age, customers are really looking for the emotional connect and next generation customer experience, which Banks can really make happen when compared to the new age non-banking entities.

Lending system with agile operating model and responsive technology solutions to play a major role

Banks need to come out of their diffidence and revisit their operational model. Especially in the area of traditional loan origination experience – built on outdated technologies, cumbersome policies and information processing from disparate systems that is typical of any banking application. According to Forrester’s The State of Digital Banking 2021 Report, only few leading banks are on the path of digital transformation, a sizeable number of banks are struggling in their transformation journey owing to a host of factors.

It is a known fact that the typical application portfolio of a bank comprises of disparate systems for various business processes that evolved over the years as silos with little or minimal integration. Non-banking entities on the other hand are fully leveraging the FinTech advancements and are focusing only on one such activity that offers them the required level of flexibility and configuration. This will help them achieve the product innovation with reduced time to market, improved operational efficiency and better customer experience. In addition, tightly coupled systems with rigid processes and products offering minimal scope for configurability poses operational challenges to banks in integrating with other systems and also in extending lending to all service delivery channels.

Self-service channels with anytime and anywhere capabilities hold the key

Given the evolution of the lending industry and the changing market dynamics, enterprising banks have started adopting more sophisticated platform based solutions that are built only for lending. Though it is a good start, banks need to adopt specialised solutions leveraging technology advancements that offer the complete suite, within lending systems, to successfully compete with non-banking FinTech entities.

Lending system compatibility with various channels including a web application or a mobile application is not just a business imperative, but is the need of the hour considering today’s dynamic environment of rapid shifts in consumer sentiments and expectations. The adoption of digital capabilities are expected to do more than just provide information, offer better insights and control over the loan proceedings, but also pivot the bank to offering differentiated value propositions, new areas of growth and building customer trust.