Photo by Adeolu Eletu on Unsplash

You only get one chance to make a first impression!

Lenders and leasers understand very well the importance of the loan onboarding process. Making customer journeys as smooth, seamless, and fast as possible, while complying with all regulations are key to decrease Customer Acquisition Cost and increase profitability. This is why they have heavily invested in loan origination software in the past decade, with the promise of a muuuuuch easier lead conversion.

• “Was this promise kept?” asks the ingenuous person.
• « 😖😤😡🤬 » replies the CEO of the lending institution

Being a customer who tries to get a consumer loan online is no fun...

Try and subscribe a consumer loan online, you will understand why nearly half of customers do not believe a 100% online process is possible.

First, let’s try with an online broker who promises you will “get your loan online within 5 minutes”. After 20 minutes, the borrower receives one offer in the form of a 92 page contract which he/she is expected to read, print, sign, and mail! During this long and painful process, he/her has not even been invited to make a loan simulation and play with installment amounts or loan duration. Figuring out the best option would require going back to the beginning of the process and starting again with a different loan duration, for example. At this point most people would probably give up, break their computer, or both.

Second, a traditional bank proposes an incredibly attractive rate on Google® but is quick to disappoint, as the only way to get additional information is to phone a call center.

Oh the joy of providing the same document several times!

Let’s discuss offline subscription then. Well, it is not a walk in the park either... A study[(1)] shows that 35% of customers are not satisfied with the transmission of documents to the institution. 19% of them even say they have been asked for the same document at least twice1. Another common criticism is the lack of information throughout a (too long) process.

Why is a loan origination software not enough?

Most financial institutions have not sufficiently improved the customer experience despite heavy investments in loan origination software because:

1. At least part of their software existed before most people knew that smartphones would even exist
2. They have gone through several or continuous painful renovation projects which have cost way more than expected and have only solved some issues

Let’s face it, putting a loan origination on top of a legacy system is like trying to run Office 365 on Windows 95®. A team of incredible heroes, I mean engineers, will spend an absurd amount of time to tweak both systems, and then, maybe a few functionalities will work. But you might as well buy a computer that runs Windows 10, and spare yourself a lot of expenses and frustration.

The hard truth: there are no half measures

1. A seamless and fully digital customer experience requires a whole solution that was thought for a world where high speed internet is commonly available. It is true of your phone, your TV, your PC... and your lending system.
2. To connect and work easily with commercial partners, technical partners, customers, your system should be API-native. Building multiple APIs on a system that was not designed for it is doomed to bring mixed results.
3. If you want the best customer experience, chose a system which was designed with this priority in mind from the beginning, not as an afterthought. In fact, such a system will also help the employees experience as well as the productivity, but this is another story...

But this is another story.

1. Parcours & expérience client B2C dans la banque – Etude ITESOFT par Next Content – Septembre 2019