COVID-19 sped up digital transformation around the world. Businesses that had put-off adopting digital technologies pre-2020, scrambled to find new ways of operating, and had a crash course of trial and error just to keep things running. With new ways of working and process efficiency, together with an increase in consumer expectations around service excellence and speed, we know that digitalisation in lending is inevitable!
So before embarking on the journey, it may be useful to consider key insights from those who have navigated the path before. We’ve consolidated learnings and insights into five key considerations that may help you to understand what’s involved and how you can do it with less risk in blowing out time, scope, resources and budget.
Whether you’re building the solution in-house, or adopting an out-of-the-box platform, the change is going to involve a broad range of internal stakeholders. And as we know change also involves a mindset shift which in turn requires engaging the hearts and minds of all those who will be impacted by the change.
As part of the engagement process you may want to consider conducting a needs analysis involving all areas of the business, and having discussions around:
- What happens on the front line when talking to members about loans
- The lending process itself
- Credit risks and other regulatory requirements
- What might happen internally across the team and ways of working
- How do staff feel about the change
Facilitating conversations and activities that encourage input and questions from a broad range of staff is important to help everyone to have the opportunity to engage, take ownership and provide input to the solution.
Conversations and activities can start from conception of the idea, and should continue through the duration of development, implementation and business as usual. You might even consider involving staff in platform training and testing.
Ongoing engagement will also help your organisation gain a clear understanding of the new practices, processes and ways of working that need to be explored with the introduction of digital lending.
Don’t wait to involve your staff until you’re ready to implement the change. Be proactive, think broadly, consider impacts across your whole business and engage early and frequently.
When digitalising your lending processes, it’s important to update any vendor contracts, or engage in new ones, as soon as possible and gain a clear understanding of your lending requirements.
Having these conversations early and connecting vendors with your platform partner, means the process of digitalising won’t be held up by delayed discussions, contracts that haven’t been signed, or APIs that need to be built. Early and clear communication will also help keep vendors engaged as the project unfolds and keep vendors on board with any developments, operational or technical changes, and any shifting responsibilities, accountabilities, expectations and outputs.
#3. Shifting experiences for customers
Both customers and staff will experience changes to the lending process. For customers, a streamlined lending process will enable faster time to loan approval and money in the bank. However, digital platforms are just one customer engagement channel, and the digital lending experience needs to be considered in line with customer preference and within the broader range of channels that a customer may have access to.
So in digitalising your online lending and developing an online customer experience, consider how this new digital lending process works with other channels and workflows.
Best practice end-to-end digital solutions offer dynamic platforms that are accessible by staff, customers and brokers alike, and can be set up with a specific level of access and user view. This means that having the one dynamic platform makes it easier for your staff, customers and brokers to view the same application, any potential gaps and needs, and monitor progress.
Having one dynamic view of the application also means you can complement the digital lending experience with other channels depending on the customer’s preference ie. emails, phone calls, face to face interaction, to assist them at each step of the loan application. In simple terms, if a customer isn’t comfortable going through the lending process purely online or requires additional support to apply for a loan, it’s easy to pick up the phone and talk with your customer about it as you can see what they see.
If you’re building the solution or adopting new technology such as a SaaS lending platform into your business, there are a few things to keep in mind:
- Get to know your supplier and make sure they’re the right fit for you. You’ll be spending a lot of time together so you’ll want to ensure you’re on the same page with ways of working, values alignment, upfront communication, project methodology, accountabilities and that you’re working towards the same end goal.
- Understand the time commitment that will be needed of your staff to implement the new platform. Many lenders still have their “day job” to manage and digital transformation can take up a lot or a little, of your time. Double check with your lending platform partner, what their expectations are, what load they will carry, what their time commitment is and also what they will expect of you.
- Expectation management! Make sure that all internal stakeholders understand the capabilities of the lending platform and create a clear project plan so everyone knows what to expect.
- Most importantly, ensure all relevant parties are involved in the onboarding process, and keep your communication open every step of the way.
Lastly, it’s also important to consider how digital lending will help you in the future. To do this, it’s useful to ensure that:
- You’re implementing processes that aren’t too costly to maintain
- You’re investing in digital that is nimble and agile so that you are not at risk of technical debt
- You’re choosing solutions that will evolve to continually meet your needs over time. This is critical given the developing lending ecosystem and improved regulatory and compliance initiatives such as Open Banking and comprehensive credit reporting
Digital transformation is a big project no matter what size lender you are, but there are ways of managing the process to enable a smoother delivery. It’s important to look backward to learn, and then look forward to succeed.
If you’re ready to embrace digital transformation, what are you waiting for?