Online loan origination systems have radically improved the lending process. By leveraging these innovative systems, banks and credit unions have streamlined loan process workflows, making loan teams more efficient and enabling them to process more loans in a faster timeline. In addition, loan origination systems help negate administrative errors, document version-control issues, and inconsistent approval decisions. The productivity gains incurred by implementing these advanced systems enable financial institutions to reduce costs.
Loan Origination Systems Provide Impressive Backoffice Productivity Improvements
Since customers upload all their documents to the online loan origination system, information quickly gets to underwriting, which helps speed the loan approval process. And because these sophisticated systems automate the various loan qualification criteria that applicants must adhere to, they enable faster, more accurate decisions, and the approval time from application to close is swifter.
Plus, tech-savvy customers can apply for a mortgage or car loan right from the convenience of their mobile phone and enjoy a digital buying experience similar to their other online purchasing.
While these gains in loan decision speed and lending officer efficiency result in an overall reduction in costs, there is still room for improvements in the online loan process, particularly on the customer-facing side.
Customers Struggle with a Lack of Engagement in Loan Process
Staff at financial institutions often send customers seeking a loan directly to their online loan origination system with little direction. Frequently, the only instructions staff give are for customers to fill out the application and that the system will let them know if they are approved.
This process leaves customers feeling uneasy about the loan process. Without an expert to engage with, customers lack knowledge on available loan types, interest rates, and approval criteria. As a result, customers have no idea if the loan they are applying for is the right loan for them. In addition, since systems do not reveal interest rates upfront, customers are regularly confused about financing costs.
And while it is an efficiency enhancement for financial institutions to receive customer’s financial documents online, some customers are concerned about which documents to upload and the security of the process.
Optimizing Your Loan Origination Investment
By front-ending a loan origination system with a customer engagement platform, banks and credit unions can optimize the investment they have made in these innovative systems. Customer engagement platforms use digital guided conversations to understand customers’ current needs and situations and guide them to the right loan. Because loan recommendations are based on customer’s actual circumstances, the proposed loan genuinely meets their needs. As an example, digital guided conversations discuss income and debt details, which impact loan terms. Consequently, the customer engagement platform will recommend a loan that considers both income and debt. Additionally, since that customer has engaged with bank experts on this topic, they will understand why that loan is the best fit for them.
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Digital Customer Engagement
Learn more about digital engagement solutions for financial institutions that increases customer satisfaction while unifying all channels to provide a consistent customer experience.
Digital Guided Conversations Give Customer Answers to Pressing Questions
Through digital guided conversations, customers can ask questions about the numerous documents required for their loan applications. They can also engage on issues around approval criteria that will boost their confidence in the success of their loan or give them actual reasons why they are not approved to better prepare for future applications.
Customers who participate in digital guided conversations with financial institutions are more knowledgeable about their loans. For instance, through the digital guided conversations, loan terms will be addressed so that customers understand the differences between a 30-year mortgage and a 7-year adjustable and why the loan recommended is the best fit for them.
This engagement during a loan process which individuals often find stressful, demonstrates a financial institution’s empathy for their customers at a vulnerable time in their lives.
Financial Institutions Realize 40% Higher Approval Rate on Loans
Banks and credit unions that have implemented customer engagement platforms realize fantastic results. They see that the quality of credit applications from applicants who visit a digital conversation guide to be much higher. For instance, a Super-Regional Bank in the mid-west revealed that loan applications from applicants who visit a digital conversation guide as the first step in their online loan process on average have a 40% higher approval rate than those who have not visited a guide.
Ignite Sales is the leader in digital customer engagement, using artificial intelligence for engaging analytics to facilitate growth, deeper product penetration and increase satisfaction levels of bankers and customers.
