When it comes to lending, what members actually see is just the tip of the iceberg: 90% of successful future-ready lending rests on automation infrastructure that is largely invisible to the consumer. By applying what Cornerstone Advisors’ Sam Kilmer refers to as “Big Rocks” to digital and technology strategies, organizations of all sizes, industries, and digital maturity can construct processes and platforms that help them survive—and thrive—in any conditions.
What are your “Big Rocks”?
Before you can build anything, you need to identify activities which will have the biggest impact on your operational foundation, aka your “Big Rocks.” In a recent webinar, I had the privilege of discussing five “Big Rocks” with Sam Kilmer of Cornerstone Advisors and Dave Brydun of BCU as a guide for organizations looking to understand which priorities will help them navigate the future of lending.
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1. Think of UI as the fast lane of UX
When members begin their lending experience online, they generally expect to move through the process faster than if they were to use in-person channels. To meet and exceed these expectations, UI should make navigating websites, applications, and portals seamless with single sign-on and configurations and APIs to remove required fields, shifting most of the work to back-end infrastructure and enabling quick, simple UX.
2. Automate loan fulfillment
There’s a big opportunity to reduce “behind the scenes” human work in loan fulfillment, allowing faster decision-making and pipeline movement. Members have already become accustomed to this automated experience with credit cards, and lenders need to automate underwriting and decisioning if they want to stay competitive while increasing long-term cost efficiencies.
3. Fuel lead generation with data
Financial institutions right now tout a 2% to 3% effective cross-sell as a fantastic achievement, but fintech providers should be able to get 4% to 7% cross-sell effectiveness by presenting qualified applicant-specific offers that transform a sale into a partnership. Organizations have tremendous opportunity to leverage data for personalized cross-sell offers to leads based on their activities with that institution, as well as other issuers.
4. Take a direct approach to auto loans
Direct auto lending presents a huge opportunity to take advantage of a lower acquisition cost and more opportunities for cross-selling. Leverage origination, core, and even collection data to track and predict member behavior and increase the lifetime value of their business.
5. Use contact center to differentiate
Although many members want to complete a lot of retail lending processes on their own, a significant portion will need more hand-holding than fully digital experiences offer, specifically those undertaking complex transactions for the first time. Additionally, great contact centers can be segmented to engage in both proactive and responsive activities, driving sales with inbound and outbound efforts.
Every financial institution’s readiness and capability for digital transformation is different, but it is essential to identify two to five “Big Rocks” that can elevate your organization’s adaptability, and then track progress as you move them out of the way.
Larry Edgar-Smith, SVP, Product Evangelism at Temenos, oversees day to day business operations for the Temenos Infinity solution, including product roadmap and vision, software delivery, quality assurance, professional services and customer management.
Credit Union Magazine’s Summer 2023 issue highlights the lending outlook for the rest of the year, how credit unions leverage fintech companies to boost digital lending, the power of lending partnerships, common Bank Secrecy Act violations, and the shift board members must make when becoming chair.
