It’s difficult and perhaps fruitless to think “beyond technology” when it comes to future trends and innovation in the financial services sector.
Rapidly advancing technology is now so ubiquitous and so powerful that it has become the overriding force of change in the world today.
I believe that means a critically important trend will be the humanization of technology through human-centered design.
Now that transformative technology is everywhere and almost magical in its capabilities, the technology itself has become less important. What matters now is the elegant application of technology to solve problems for real people in the real world.
How is that done? It is accomplished best by marrying human-centered design to the latest advances in behavioral science.
Human-centered design is simply an approach to innovation that begins with empathy, draws insight from diverse functions and disciplines, employs visual thinking, and uses prototypes to validate ideas.
And what gets designed must be scaled. Implementing and scaling products or service experiences developed using human-centered design requires modular, configurable operations--think flexible, "Lego-like" business model design.
I see two areas of lending operations where this approach will become more imperative in the near future:
1. Loan origination is one of the last holdouts against simplicity and automation in the banking world.
Consumers still expend too much time and effort navigating clumsy processes to get a loan. They won’t stand for it much longer.
Building seamless backend handoffs between key lending processes is the first step toward making each borrower’s experience simple and easy.
2. The need to more quickly and tightly integrate vendors and strategic partners into lending operations.
Imagine if you had a clear, standardized, and documented protocol around your credit union’s underwriting processes. Most of us have heard of APIs [application program interface] in the field of open architecture software development.
Now imagine creating OPIs—operations process interfaces—for the handoffs between the core stages of a loan lifecycle. You could use these documented standards to connect your own credit union’s loans sales channels to your underwriting function.
And you could use the same standards to plug in other sources of loan applications.
Standardized connections between stages of the lending process will enable lenders to mix and match and adjust.
They’ll integrate vendors, third parties, partner credit unions, and other financial institutions into their business models to optimize revenue and member service at the lowest available cost and risk.
The most advanced and innovative banking businesses are pioneering these techniques today. In the near future, everyone will need them just to keep up.
Credit unions that start building a human-centered design culture right now, and those that lay the groundwork for modular business models, will emerge as the highest-service and lowest-cost lenders of the future.