Lending Software Solution Spotlight: Online Loan Applications

Lending Software Solution Spotlight: Online Applicaitons

2021 has been a busy year for Baker Hill as we continue to launch lending software solutions that help our clients quickly deploy simple to use loan applications that can be made accessible to either their customers or to their own internal staff. Our applicant-facing online application product was launched earlier this year and our staff-facing banker application product was released this fall. While we market these as distinct lending software solutions to help clients with specific use cases, based on conversations I’ve had with our banking clients there are pain points that span both products’ capabilities. If your organization is actively evaluating digital loan application solutions, you should keep these three considerations in mind to best position yourself for a successful lending software solution rollout.

Know your customers (and your staff!)

I’m not talking about identity verification or Know Your Customer (KYC) related efforts here, I’m instead talking about knowing the digital maturity and savviness of the end users you intend to use your digital lending software solutions. Your loan applications will be used by a wide spectrum of individuals, all with various levels of tech and/or banking savviness. And when it comes to your own staff, as one of our clients commented, “the tech savvy don’t know banking, and the banking savvy don’t know tech!” Now while that may sound like stereotyping it does indicate that you need to make sure that any digital application you roll out is easy to use and won’t provide an intimidating experience where users struggle and eventually give up.

For staff-facing applications, staff that are newer to the banking industry may quickly be intimidated by questions that customers might ask them about products or lines of business that are outside of their comfort zone. For example, the assistant branch manager that processes consumer loan applications 95% of the time might get tripped up when a small business owner or middle market borrower starts asking detailed questions about collateral and funding questions specific to business loan requests. All the training in the world won’t make that assistant manager fluent in business lending if that’s not what they’re spending their time on each day. And applicants don’t like to hear the dreaded “I’ll have to get back with you on that” since they might fear that means delays of days and likely weeks before they’ll be contacted with follow-up. You can defuse some of this potential intimidation by crafting your loan applications with leading questions that make your staff ask intentional questions that will help steer the loan request toward the appropriate products. Put as much coaching and educational tips into the staff-facing application too so staff can be reminded to ask the right questions and pair the requests with the right products.

Growth without efficiency doesn’t scale.

So many bankers I talked to say they expect their aggressive loan growth goals to be facilitated in large part by their retail branch staff. Well, as we just discussed above, this can come with some challenges when it comes to the depth of banking knowledge that these often-early career folks might have. They might not even have a mortgage or a car loan of their own yet, and yet the pressure is on them to rapidly become experts on these products! This isn’t going to happen, so these individuals need lending software solutions that will help them succeed, since you can’t expect them to confidently handle a growing volume of applications while still juggling their other responsibilities.

Whether it’s a public facing loan application or one that’s used by your staff, you must minimize the downstream rework and delays that will occur if the loan request gets paired with the incorrect product. Inexperienced staff or borrowers might not know what product best fits their need, so they might just quickly push the application through based on their best guess and hope for the best. The problem is that once the credit underwriting or compliance team gets involved and points out all the reasons why the selected product isn’t appropriate, this can kick off a series of delays that lead to a frustrating customer experience since now new disclosures are getting shared, new questions might get asked, emails are flying, and this all takes time to mop up. If this process takes too long, applicants will just give up and go to a competitor.

Efficiency also needs to be a concern after the application gets submitted in the lending software solution. The more complex the loan request and the more dollars involved, it’s likely there will be more follow-up questions regarding financial documentation like income verification, tax returns, financial statements, etc. If you can keep this important part of the loan process within the same lending software solution as the application process, then you’re creating a consistent and easy to follow process for your customers and staff in a channel that they’re already using.  At Baker Hill, our client portal is used to serve this very need as the centralized hub for all document requests and collection efforts, and it works seamlessly with our application products, so customers don’t have to context switch between various digital channels.

Avoid games of digital tag.

The third key consideration is around the effectiveness of your communication processes that support your digital application efforts. Responsiveness can be a real superpower for lenders, and many traditional lenders know that FinTechs are aggressively trying to steal their customers with sleek and simple low-friction loan applications and friendly, cleverly named chatbots just waiting to help online loan applicants. The amount of time applicants are willing to wait in the digital line is shrinking with each generation, and if your organization can’t provide quick responses to customer requests then loans will start bottlenecking and this will not result in happy customers. Any perception that your organization doesn’t have its act together and those communications are going into a black hole will be fatal to your efforts.  Make sure that outstanding responsiveness is a pillar of your digital application and lending software solution ecosystem. Lenders that can quickly acknowledge customer questions and provide effective responses that keep the application process humming will be at a distinct advantage over those that are still struggling with who owns online communications surrounding a loan request.

To simplify and streamline your responsiveness efforts, take advantage of a client portal that pushes all communications into a single online destination and that supports pushing notifications via email or within your lending software solution if possible. Ask applicants to pick a preference for how they want to be contacted since maybe they have email fatigue and just want to check the status of their application online when they feel like it. And take a hard look at incenting staff not based solely on the quantity of successful loan submissions they make, but also on their ability to be responsive throughout the full application lifecycle. After all, shots on goal are important but getting the ball successfully past the goalie requires finesse and a commitment to focused and timely effort.

Baker Hill has been providing innovative lending software solutions and expert guidance to banks and credit unions for over 35 years. Built by bankers for bankers, we know the importance of automating manual processes and creating digital lending experiences. If you’re interested in more ways to implement digital processes into your institution, visit our digital lending resource guide to learn more.

You might also like:

Blog Rewind: Meeting the Digital Expectations of Borrowers

Managing Risk in Digital Lending