While many businesses are moving to digital channels, paper usage remains incredibly high. 65% of small- and medium-sized businesses spend between $1K and $5K each month on paper-based processes. And 50% of all business waste is paper, which contributes to paper filling over a quarter of total landfill waste.
As the knowledge of this waste becomes more mainstream, we’re seeing increased interest in paperless initiatives, especially with the COVID-19 pandemic and the spotlight it placed on distanced interactions. In fact, IDC estimated that 400 billion fewer pages would be printed in 2020.
The lending and banking industries are not immune to this change. Solutions that support paperless lending have become increasingly mainstream as lending leaders seek meaningful ways to reduce their reliance on paper.
This move toward paperless lending brings a number of obvious benefits to financial institutions, such as time and money savings and a reduced carbon footprint. It also brings greater convenience to consumers who no longer have to enter a branch to sign physical applications.
How lenders can further benefit from paperless lending solutions
Before diving into the specific ways that paperless lending solutions bring positive change to financial institutions, it’s helpful to define paperless lending to understand what it is — and what it isn’t, despite what it may seem like on the surface.
Paperless lending is an ideal; it’s the push to minimize the reliance on physical interactions in an era defined by digital interconnection. But the reality is that some processes simply can’t be truly “paperless.” For example, some parts of the mortgage process still legally require wet signatures, depending on local regulations. The aim in the shift to paperless lending is the eradication of paper where possible and the minimization of it for what remains.
Beyond the more straightforward environmental benefits inherent to a paperless approach, there are also some bonus advantages of paperless lending solutions that many financial institutions may not have considered. These include the ability to:
1) Make faster lending decisions
Thanks to seamless data integration with third parties, paperless lending solutions can help financial institutions pre-approve qualified customers for each product. This results in a more efficient operation for the lender and a smoother experience for the consumer.
2) Better meet customer expectations
Today’s consumers expect their banks to meet them on their terms and on their schedules. Paperless lending solutions achieve this by offering a seamless experience from application to close. Customers can start an application on their mobile phone or in a branch, for example, and seamlessly complete it from their desktop.
3) Increase conversion rates
Applying for a loan manually can be tedious and time consuming, and drawn-out timelines create many opportunities for borrowers to abandon the process. Making applications paperless, simple, and fast gives lenders the chance to reduce dropoff and improve application pull-through rates.
4) Streamline back-end checks
Automated verification and other back-end checks can be achieved with paperless lending solutions, thanks to their direct integrations with third parties that can verify identity, assets, employment, and income.
5) Make employees’ lives easier
With some paperless lending systems, lending teams have access to a digital workspace where everything they need is all in one place. The efficiency this brings to common workflows frees up lending teams’ time so they can deliver personalized service to customers. Having access to best-in-class tools like these also help lenders attract and retain top talent.
6) Reduce lending costs and increase profitability
With slim margins, lenders are always looking for ways to increase profitability. Not only can paperless lending solutions eliminate costly manual tasks, but they can also reduce labor costs per loan by automating processing steps and shaving days off of loan cycles.
How Blend’s paperless lending solution can help lenders realize these benefits
Blend’s Digital Lending Platform offers a carefully designed user interface that can help lenders deliver seamless customer experiences across multiple channels and product lines, from application to close.
With built-in functionality that facilitates instant decisioning, intelligent product recommendations, and automated stipulations, Blend can help lenders speed up the loan application process. Take Affinity Federal Credit Union, for example, which is using Blend to help minimize many of the back-and-forth processes that cause delays. Their team has seen an eight-day reduction in turn times.
“The idea that we could have a mortgage loan where we didn’t have to ask for pay stubs or asset statements was such an idyllic, blue sky type of mind-blowing concept,” said an Affinity IT leader. “But a month after implementation, that’s exactly what was happening. When you get to that point, you approve a mortgage in 48 hours.”
Blend also helps lenders bring products to market faster and more cost-effectively thanks to out-of-the-box solutions for all major consumer lending products, integrated data services, and flexible control over design elements.
Ultimately, these capabilities can help lenders deepen customer relationships, fostering higher retention and customer lifetime value.