The landscape of lending has undergone a remarkable evolution. From traditional brick-and-mortar institutions to online platforms, the way people access loans has drastically changed. Among lending institutions surveyed:
- Nearly three-quarters now use digital channels to serve both new and existing clients
- Over 70% are implementing digital loan origination for personal loans.
- 73% can electronically prepare loan documents.
In this blog post, we'll delve into the trends and innovations shaping the digital lending sphere, and explore how lenders are adapting to meet the needs of modern borrowers.
The rise of digital platforms
Nearly two-thirds of people who have applied for loans in the past two years did so either partially or fully online. With the proliferation of smartphones and internet access, digital lending platforms have emerged as convenient alternatives to traditional lending institutions. These platforms offer borrowers the flexibility to apply for loans anytime, anywhere, making the process more accessible and streamlined.
Personalized experiences
Over 70% of banking decision-makers plan to increase their investments in personalization. Lenders are leveraging data analytics and artificial intelligence to tailor loan offers to individual borrowers' needs and preferences. By understanding each borrower's financial situation and goals, lenders can provide customized solutions that enhance satisfaction and loyalty.
Automation and efficiency
Automation has become a cornerstone of digital lending, enabling faster loan processing and decision-making. Through the use of algorithms and machine learning, lenders can assess creditworthiness, verify information, and approve loans in a fraction of the time it takes with traditional methods. This not only improves efficiency but also reduces the potential for human error.
The key moving forward will be adapting and refining. While 76% of banks have implemented new automation technologies, there’s room for improvement. Nearly 40% of banking professionals say their companies will need to restructure their processes
before they can pursue automation any further.
Empowering loan officers
Despite the advancements in automation, the human touch remains essential in the lending process. Recognizing this, institutions are increasingly prioritizing not only the borrower experience but also the experience of lending staff. This shift toward focusing on the "total experience" encompasses customer experience, employee experience, and user experience as integral components of success. According to Gartner, institutions that provide a total experience are anticipated to outperform competitors by 25% in terms of both employee and customer satisfaction by 2024.
To achieve this, successful lenders are empowering their loan officers with tools to better assist borrowers. For example, Glance’s co-browsing allows loan officers to join borrowers on-screen, offering guidance through the complex and stressful application process. This combines the power of human connection with the latest technology for convenience, transparency, and an overall better experience for both the lender and the borrower.
Access with security and integrity
With solutions like Glance, loan officers are able to share important documents and forms with borrowers in a comfortable and secure environment. Personal and private data is hidden, while giving officers the ability to guide their clients through the process, even helping them fill out the forms right on-screen.
Read: Glance yields higher returns for CSAT and digital transactions at Axos Bank
E-signatures and digital mortgage closing
The rise of e-signatures and digital mortgage closing offers borrowers unprecedented convenience and efficiency. With e-signature technology, borrowers can sign documents electronically from any internet-enabled device, eliminating the need for cumbersome paperwork and expediting the loan approval process. Digital mortgage closing takes this convenience further, allowing borrowers to complete the entire closing process online, from signing documents to transferring funds, thereby streamlining transactions and reducing costs for lenders. These digital solutions not only enhance the borrower experience but also provide greater transparency and accessibility throughout the process.
The bottom line
The evolution of digital lending is marked by a shift towards personalized experiences, automation, and human-centric innovations. The lenders that succeed in this new era are those that embrace technology while prioritizing the needs of their customers. By leveraging tools like Glance to empower loan officers and enhance the borrower experience, lenders can thrive in the digital loan landscape while fostering long-term loyalty and growth.
