How banks can gain an edge with milestone-based lending

Blend commissioned a study conducted by Forrester Consulting for this customer-centric research and analysis. The goal: pinpoint emerging customer needs and identify actionable steps to build a successful milestone-based lending strategy.

This report provides real customer insights, data analysis, and strategic recommendations.

Are you and your organization in touch with today’s customers?
Test your knowledge.

When a customer is selecting a digital lending platform or technology partner, which of the following capabilities is more important?

The ability to deliver a decision or preapproval in real-time

of customers consider the ability to deliver a decision or preapproval in real time to be important or very important

The ability to prequalify consumers for a loan product and make specific offers and recommendations based on the prequalification

of customers consider the ability to prequalify for a loan product and make specific offers and recommendations based on prequalification to be important or very important


Here’s where we are today.

After surveying 2,026 banking consumers and 168 lending strategy leaders, we found that success in capturing new consumer business and deepening existing relationships is determined by how well a financial institution is able to identify, understand, and respond to customers’ life milestones. We’ve always known this anecdotally, but now it’s abundantly clear.

Furthermore, there’s a growing gap between shifting consumer needs and traditional financial services. And this service gap has proven to be an opportunity for an increasing number of digital disruptors, all of which are cutting into the market share of established institutions — particularly those slow to adapt.

Our full report details the insights and recommendations that we believe you will find valuable. To help set the stage, here are a few key points to understand as you move deeper into milestone-based lending strategies.


What is Milestone-based lending?

Consumers are looking for help as they hit life’s many milestones: a new job in a new city that requires a new mortgage; finally building out the ideal kitchen; a ring, a toy, a dream. And they are choosing whatever financial institution has the best offering to support the particular need they have in that moment. In fact, 72% said they would prefer to work with a financial institution that understands what’s currently happening in their lives. These milestones are opportunities for both consumers and banks.


Customer loyalty is a myth.

Nearly half of consumers surveyed believe that all banks are basically the same. And 71% of those surveyed said, yes, they would take their business elsewhere if given a better, more relevant offer. This means that understanding milestone lending is not enough. Financial institutions must also recognize and act upon these significant consumer life events to drive relevance and fit in their product offers.


Your competitors are 
making moves.

Like you, other financial institutions are learning more about the importance of milestone-based lending. And they’re taking action. Of those surveyed, 60% have already adopted milestone-based strategies. Furthermore, 69% are actively increasing their investments in these strategies and 62% plan to continue raising investment through 2022.


The opportunity is now.

The truth is that many financial institutions have yet to catch up to shifting consumer demands. Like 85% of those surveyed, you too may believe that dynamic segmentation is important, but are you truly optimized for it? In our survey, 71% said they were not. Let’s face it, the challenges of 2020 are now the opportunities of 2021. And every day counts.


Here's where we're heading.
This report is your 2021 roadmap.

Now that we know how important milestone-based lending is for the success of financial institutions, let’s build out the strategies and tactics to support this approach. Inside this report you’ll find clear, actionable recommendations to help plot your course. From systems integration to front-end experiences to insights-driven lending, this report is a guidebook for winning business and differentiating yourself beyond the lowest rates.

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