The ultimate guide to digital lending for financial services providers

For financial services leaders ready to adopt a digital lending strategy, the stakes have never been higher. Today’s consumers expect the same excellent service from their financial institution that they receive from their online retailers. And lending teams expect greater efficiency — they know it no longer makes sense to spend hours on arduous, manual tasks and other steps that may be easily automated. 

The question is: why are some financial services providers experiencing major drawbacks even though they have implemented technology, while others are seeing sweeping benefits to both the customer experience and operations? The answer may be in how digital lending is being implemented. 

Necessary to any digital transformation is a thorough understanding of the solution. For digital lending, it’s important to understand what it is, why it matters, and how the right solutions can solve your customer and operations pain points.   

This guide outlines how digital lending can help your financial institution meet the rising expectations of customers and empower your teams to be more productive and efficient in the process. You’ll learn:

• What digital lending is and why it’s essential
• How digital lending solutions can elevate customer satisfaction
• How fintech lending can help save resources and improve efficiency
• How to determine the most suitable digital lending platform for your needs
• What’s to come for digital lending in 2022 and beyond

Why is digital lending an industry essential?

Digital lending takes traditional lending processes online — which is exactly where your customers want to be. By meeting this baseline modern demand, digital lending can provide the ease, access, and transparency consumers have come to expect in many aspects of their lives. And while this brings benefits to all of your customers, it’s important to note the major buying power of digitally-savvy millennials. For instance, in the world of mortgages, millennial homebuyers currently account for 43% of the national market. 

Digital lending is great for lending teams as well, with the potential to boost lender productivity, reduce costs, and improve customer data and insights. 

Take customer satisfaction to new heights with digital lending

Today, your consumers are savvier than ever with mobile-first habits and a penchant for the latest remote tools and technology. And with the proliferation of push-notification marketing and apps for banking, investing, insurance, and more, they’ve become accustomed to proactive, highly-targeted offerings. 

The power lies in personalization

Digital technology trends have revolved around personalization, and that’s unlikely to change. In fact, 66% of customers expect brands to understand their unique and specific needs, yet just as many (66%) believe they’re only regarded as numbers or transactions. 

With digital lending solutions, lending teams can personalize the experience for customers:

• Tailor the lending process to match customers’ unique journeys
• Use data to refine your offerings to individual customer profiles and needs
• Provide greater transparency and make the lending process easier to understand
• Use end-to-end software to deliver a familiar experience from initial offer to close
• Offer customers multiple ways to view updates and access their information

How digital lending solutions save resources and improve efficiency

Approach your organization’s greatest challenges using the advantages of digital lending. Digital lending solutions can improve organizational productivity and profitability. And they can help improve everyday business for your employees with operational efficiencies, data-driven insights, a reduction in manual work, and systems designed for greater flexibility. 

Explore some of digital lending’s greatest opportunities in detail: 

Increase productivity

Speed up the lending process at every step when your manual workflows are automated and brought online with digital forms and real-time decisioning. Digital lending platforms can help you serve more customers better and faster — increasing customer satisfaction while introducing opportunities to increase revenue.

Reduce human error 

Loan automation can be used to minimize employee or applicant errors. Key customer data can be securely and accurately uploaded, organized, and reported, which helps to reduce the likelihood of errors, missing information, and misinterpretations from paperwork filled out by hand. 

Improve decision-making

Enjoy readily-available access to data-backed insights for lending offers and approval decisions. Leverage third-party integrations to access additional data and extra tools for fast financial decisions.

Save resources

Make a (healthy) impact on the environment with paperless lending solutions. When you cut down on paper use, you also reduce the expenses associated with physical database storage — from rent through utilities. 

How to evaluate digital lending software solutions 

While it can feel daunting to sort through a selection of potential new software solutions, the process can be simplified. First, create a shortlist of options. Since lending platforms can vary significantly, that can actually make it easier to build an initial list of prospective solutions. Then use the questions and criteria below to evaluate your top candidates.

Ease of use

• Is the platform easy to use? 
• Will onboarding be time-intensive or complicated?
• Is it designed to create frictionless experiences for customers and employees?

Functionality

• How do spotlighted features align with your organization’s needs? 
• Does it specialize in every lending product you offer so you can do everything with a single platform?
• What are its compatible integrations? 
• Does it have the flexibility to meet your upcoming digital infrastructure needs?

Relationship dynamic and support 

• Is the provider simply a software solution vendor or will they act as partners in your success?
• Is their customer support accessible and robust? 

Security and compliance

• Are their lending-as-a-service solutions protected by the latest security protocols?
• Can they help you stay compliant — even as policy evolves?

Get to know the top digital lending features for your success

Take a deeper dive into some of the features of lending software solutions and how they can set up your financial institution for success:

• Cloud banking infrastructure provides greater flexibility, security, and scalability
• End-to-end solutions offer streamlined workflows, simplified lending, and reduced costs
• Automated workflows save time, reduce costs, and increase employee productivity
• Centralized customer data supports personalization and better, faster decisions 
• Low-code customization makes it easier to adapt products to customers’ unique journeys
• Integrations provide access to the internal and external solutions you value the most 
• Flexibility supports consumer demand for access to in-person, hybrid, or fully digital lending experiences

Future of digital lending in 2022 and beyond

Financial institutions are evolving to keep up with changing demands, reaching for flexible technological solutions to meet customer needs today and into the future. Here are some of the trends in 2022 and beyond:

Personalization for:

• Better customer service
• Relevant messaging
• Well-tailored financial offers
• Frictionless experiences to improve revenue and relationships with customers

End-to-end automation for:

• Greater efficiency
• The ability to serve more customers than ever

Real-time, data-backed decisions for:

• Speeding up the lending process
• Improving the customer experience 

Cloud flexibility for:

• The ability to adapt along with scale
• New offerings
• Ever-evolving security protocols

In 2023 and beyond, you may expect to see:

Digital lending is transforming the industry’s future

Digital lending platforms have the potential to change how your financial institution does business over the long term. Your customers and lending teams can enjoy frictionless experiences and streamlined processes, allowing productivity to reach new heights. Increase revenue, reduce costs, and strengthen customer relationships and loyalty like never before.