Unlocking Growth: Origination Gets a CX Makeover

Unlocking growth and meeting modern customer expectations for a seamless experience is no longer a luxury, it’s a necessity. In a compelling interview with Michael Moser, the editorial lead at American Banker, Blend’s product marketing lead breaks down the key insights from our consumer banking research. This exclusive conversation talks about the key ways banks and credit unions are modernizing consumer banking experience, where they are investing in AI, and how they are meeting the demands of a new generation to drive significant growth and stay ahead of the competition.

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Transcript

Michael Moser, American Banker (00:04):

According to a recent survey by future branches, insight sponsored by Blend, 41% of banking customers say that the number one challenge they have when opening a new deposit account is that it’s a time consuming process. Additionally, 39% also say the process is prone to data errors. This feedback along with expanding and shifting customer expectations, technology disruptions, and intensifying competition from FinTech Innovators is putting pressure on banks and credit unions to transform their account opening and loan origination processes. Welcome to today’s podcast, unlocking Growth Origination Gets a CX makeover hosted by American Banker in partnership with Blend. I’m your host and moderator, Michael Moser with American Banker, and joining me today to discuss and elevate recent survey results on how banks and credit unions are innovating to drive deposit and loan growth is Sara Maaske Product Marketing Lead at Blend. Welcome, Sara. Thank you for joining us.

Sara Maaske, Blend (01:13):

Thank you, Michael. I’m very excited to be here.

Michael Moser, American Banker (01:15):

Sara, let’s start with something you shared with me before we started this podcast. You mentioned joining Blend after a decade with Penn Foster, an EdTech company. Knowing how people learn, what motivates them, et cetera, seems like it could be valuable in gaining a unique ability to understand people, their needs and what they may want. Has this helped you at Blend as you partner with clients to help them understand their customers and build better, more meaningful engagements?

Sara Maaske, Blend (01:46):

Yeah, so I was at a tech company for almost 10 years and now I’ve been with Blend for, gosh, I think it’s a little over three and a half. And what I’ve learned is that people, especially when I was at the ed tech company, people like to study and learn in short bursts. They really focus on bite-sized, easily digestible, what we would call modules at the time, and then applying what they learned immediately helps with knowledge retention and the lending experience is very similar. So people want very quick intuitive experiences with immediate access to support along the way. And that’s really what Blend focuses on when we think about our product experience. So we work hard to reduce the number of fields and pages as much as possible. We heavily do a lot of integration work. We have a lot of partners that’ll help us in the application process by pre-filling the application, getting us access to data that’s high quality because what we know is that the applicant wants to feel known and seen by the credit union or the bank, especially if they’re already a customer. So they don’t want to be asked the same questions they feel their financial institution should already know. And so then pre-filling the application with high quality information really amplifies the experience. We also know people need help when they want help, they want it immediately. And so we make sure that the banker or the loan officer is always able to support, in this case, the borrower regardless of where they’re in their journey. So the banker or the loan officer can answer a phone call and help talk the borrower through an experience, or they can actually take the application and pick it up and fill it off for them in real time. We consider this a true omnichannel experience, and that’s something that we focus heavily on from a product perspective. And both of these things, both the prefilled application and then improved omnichannel experience makes the borrower and the lender experience faster, more streamlined and definitely much more satisfying for both parties.

Michael Moser, American Banker (03:39):

That makes a lot of sense. Definitely see how that could be much more satisfying. So to kick things off, let’s get a better understanding of the future Branches Insight research that we’re going to be talking about. Can you share the goal of the research, who the respondents are and why Blend was keen to be this year’s sponsor?

Sara Maaske, Blend (03:57):

Yeah, absolutely. For those of you that aren’t familiar with Blend, we are an end-to-end digital origination platform. This means in practicality that we are the application and origination layer for any home lending product, consumer lending product and account opening product. And we support it from application all the way to close. We work with hundreds of banks and credit unions across the United States. And to give you an idea of the volume that we support, we process over 20,000 applications each day. So we see quite a bit in terms of trends and we understand the consumer behavior a lot better than in another organization that might see a smaller amount of applications. So the survey we were targeting to get over a hundred lending and digital strategy executives to understand what their challenges and their priorities are for driving growth because we were able to apply the survey findings and to our insights and what we see from a trends perspective in our application data. And we think it really helps. We have a unique point of view on how the survey results are being applied to consumer behavior and what we’re seeing in application trends.

Michael Moser, American Banker (05:05):

So looking at the report, what does the research tell us about top business priorities for consumer banking in the next 12 months?

Sara Maaske, Blend (05:13):

One of the things that really stood out to us is that 47% of respondents said that they were focusing on artificial intelligence and machine learning in the customer journey. It was something we didn’t expect. We didn’t expect it to be that high I should say. And then closely following that, so that was the number one priority. And then the second one was on speeding up account origination or account opening and loan origination experiences. And that was something that we’ve obviously heard a lot from our customers and the sales cycle. So we really, it was no surprise to us. We really want to make sure that we’re giving, they want to make sure they’re giving the borrowers a very modern experience given that they have a shorter attention span and the need for instant gratification, which I kind of mentioned at the very beginning.

Michael Moser, American Banker (05:57):

That’s a great segue to ai. I think we have to talk about ai. It feels like everyone’s talking about AI these days, and I think you’re surprised that it was number one I think given the current news cycle, et cetera, but I think we’d be remiss to not talk about it in more depth. It can be a quite nebulous concept. Can you share some concrete examples of how AI is currently being used to streamline that account opening and loan origination process that the respondents said was very important?

Sara Maaske, Blend (06:32):

Yeah, I like the way you framed that too, because what we hear when we talk to our customers is they are trying to figure out how to leverage artificial intelligence and an LLM in their experience and what they can do with it. And they’ll always say, everybody’s talking about ai, but in practicality, what is the real use case? How can we actually apply it in real time? And they have lots of ideas, but I think Blend can really help them in a very practical manner. So just taking a step back, to me, AI is really a productivity enhancer, which is critical for these banks and credit unions. There’s going to be a lot of, I think AI can remove a lot of the arduous and error prone parts of the application process. This also allows the banker and the loan officer to really focus on the customer and the customers, what they care about that’s unique. So what a person can do that AI can’t obviously is the loan officer or the banker can create and provide that human touch, that human element of listening and understanding. And so I think leveraging AI with the people that you have on staff to really differentiate organizations is incredibly important. The other thing that we always talk about when we talk about AI is adoption and the evolution and investment in AI is unprecedented, as unprecedented. So being a tech company and especially one that supports a large number of banks and credit unions of all sizes, we think about AI every day and how it can be leveraged to support our customers to make sure they’re on the forefront, able to provide the customer, their customer, the consumer or the borrower, what they need. So Blend’s vision is really to be the trusted AI partner because we can accelerate growth while also reducing cost, there’s two sides of the coin: it is growing more quickly but also reducing costs. So we have a really critical role to play there. So you asked for a practical example. So I’m getting to the second part of your question. The fun example that I like to use is in the auto loan origination space, we know that borrowers will often shop around using a pre-approval letter and that when borrowers go to shop around with that pre-approval letter, if they go to a dealer, the dealer often has their own lending arm that they’re obviously trying to push. And in this scenario, you can actually use AI to make your bank more competitive because customers can on their mobile phone, if they find a car, they’re at their dealer, they found a car, they can actually upload their purchase agreement with their mobile phone and through Blends doc AI tool, we’ll actually be able to see that it is a purchase agreement, we’ll be able to validate that it’s the correct document, and then we can actually extract that data from the purchase agreement and allow the customer to in real time, finish the loan application while at the dealer in a matter of minutes. And I think this is really a cool example of how AI can be leveraged. It really helps expedite the loan application for purchasing the car. So it creates simplicity, ease obviously helps the bank become much more competitive in the space over going, starting over with the dealer.

Michael Moser, American Banker (09:37):

Well, I mean that sounds like a fantastic example. It really illustrates that real time, the consumer, the bank, the whole aspect of that origination process. And we do see quite a bit of adoption in ai, but it’s not very even. And you have some organizations very much at the forefront, others not so much. What challenges are holding institutions back from AI adoption?

Sara Maaske, Blend (10:05):

Yeah, just in general, I’ll even take a step back thinking beyond just AI and how some of the challenges that are holding banks and credit unions back from providing more of a streamlined end in origination solution. I think when we were looking at the survey data, again about 45 to 50% of respondents said the onboarding process for digital accounts or for deposit accounts and for consumer loans is really, really difficult and time consuming. So the customers are actually acknowledging that that’s a big challenge that they have to address. And this is really important, especially as they’re targeting the younger demographics because those younger demographics are obviously looking for alternatives like non-banks. So it’s important that the banks are actually able to support and focus on speeding up these application processes. And then the other thing that was interesting in the survey data was at least a quarter of the consumers, so over 25% want some sort of human intervention. So you have the people, it kind of bifurcates here you have people that really just want a streamlined digital experience. They don’t want to talk to anybody, they just want to complete the application process. And you have a quarter of it that actually wants to ask for human intervention. So you really need to have an application and a process that supports both. And I think the dichotomy here, the bifurcation, really highlights the need for a much more seamless value-driven flow between the banks and the consumers. And so I always think about this as this creates kind of a modern dilemma for banks. You need to be able to provide speed and substance. And there’s a lot of pressure to really accelerate the account opening process, but also provide guidance. And I think this guidance again, is where you start to differentiate as a bank because you can create this long-term relationship with people when you do, when they ask for help and support and you can reach out. So the good news is that you can work with somebody like a blend to seamlessly integrate the banker into the digital application to really do both to provide substance and sleeplessness.

Michael Moser, American Banker (12:07):

Can you talk a little bit more about how can an end-to-end origination solution like Blend help banks and credit unions address these key pain points like the account opening that loan origination?

Sara Maaske, Blend (12:19):

Yeah, I think there’s a lot of what we think of as really deep robust digital capabilities that we offer. So going back to we’re trying to reduce the number of pages, the number of fields that somebody would need to fill out. We want to create a consistent customer experience across all channels, across all product lines. And because Blend supports all products on one platform, we’re really able to do that. If somebody wants to open a deposit account and at the time of opening a deposit account, they also realize that they need a credit card with that same organization. You can do that in a very seamless streamlined way because Blend has all of its products on one platform and we have all the partners integrated into that platform to easily deploy on the products. So from a branch perspective, we have a lot of digital tools that support the branch staff. And then from the consumer experience perspective, we have a lot of deep digital capabilities to support any type of borrower that comes through. So facilitating smooth transfers between digital and physical interactions.

Michael Moser, American Banker (13:18):

Sounds like a big win-win both for the bank or credit union in terms of being able to cross sell that credit card on the deposit origination and then also for the consumer as he or she identifies, Hey, I do need a credit card in addition to opening this deposit account. So it sounds really interesting, but now, so in your working with hundreds of banks and credit unions helping address these pain points and sort of benefit from things such as you mentioned with the cross-sell, what lessons have you learned from implementation and integration?

Sara Maaske, Blend (13:51):

Yeah, one of the things that my coworkers like to say is that one of my colleagues, Lisa says, great technology shouldn’t be felt. It’s something that should just kind of be there to help make our lives better and easier, but we don’t really notice that. And I think that happens when you find a partner that’ll really help you accelerate your evolution. I think it’s very challenging for a lot of these banks to do it on their own because they’re competing with a lot of non-banks that have large investments in tech and they have a much larger team to support. So partnering with an org like Blend will allow you because Blend is continuously investing in AI and our digital capabilities, like I mentioned, this approach allows you to move quickly and stay competitive in this market. One of the most common pain points we hear from institutions when we’re having conversations is that cost and time and the disparate nature of their technology solutions and their partnerships makes it really, really challenging for them to operate quickly, to pivot quickly. The market’s changing, interest rates are changing, having multiple loan origination systems really makes it hard. You have data in different spots, you have a lot more tech debt. And so again, a single platform where all of your origination account opening products are makes that simplified tech stack much easier for you to react to because Blend is already investing in those areas and it just allows them just to talk to us and we can just turn things on and off for them.

Michael Moser, American Banker (15:18):

Now Sara, I want to go back to a comment that you made earlier in terms of younger generations because there was an interesting call out in the future branches report that focused on Gen Z and millennials. How have evolving customer expectations specifically among Gen Z and millennials reshaped this account opening and loan origination experience?

Sara Maaske, Blend (15:41):

Yeah, I think it’s kind of interesting or it’s neat I guess I’ll say that I feel like this audience is really driving the need or the evolution of digital experiences. And I think that’s because there’s increased competition from fintechs. That’s a top concern and a top challenge for many banks. So the survey and the survey responses obviously are giving you an idea of how impactful that is. And so attracting and retaining the younger demographic is definitely a priority. As the wealth transfer, we hear all about the great wealth transfer that’s coming, and so making sure that they are bringing these people in and they become the PFI, the primary financial institution early on is pretty critical. So I think fintechs are really able to address the expectations for today’s consumers, especially the younger ones because they’re providing instant results, seamless digital experiences, they’re going, these younger generation folks are already on using their apps, and so it kind of becomes, they’re used to these one click experiences like Amazon, the ease of Google making things personalized and making recommendations. And they really need to be able to compete. The thing I want to call out most about the survey results was like, and what banks and credit unions are focused on in investing in these digital first strategies is specifically, I think about half said they were working on AI powered virtual assistance. 46% said mobile first experiences were pretty critical. And then 37% were all talking about how to better personalize product recommendations. So those are kind of the three big areas that you’re going to see investments from banks in the next year.

Michael Moser, American Banker (17:16):

Interesting. Very interesting. Well, Sara, as we come to a close on our session, I’d like to ask you for some parting words. What advice would you give banks and credit unions as they aim to keep up with customer and market demands?

Sara Maaske, Blend (17:29):

Yeah, it’s a challenging time. I think consumers are raising the bar on how they want to work and what they expect from their financial institution. They want personalization. They want education, instant information and a very streamlined financial journey. And that’s a lot to ask a financial institution. So it’s really forcing banks to think outside the box to innovate and especially at a much more rapid pace, which can be difficult when again, you have these various tech stacks, tech debt, and limited resources. So if you’re able to really, for banks and credit unions to really be able to differentiate, they need to start focusing on the consumer building those consumer relationships. So again, adding that human element that the bankers and the loan officer can do, focusing on that and working with a company like Blend where you can bring the banker or the loan officer into the borrower journey, providing that seamless journey allows you to really focus on developing those relationships versus the completing the task of the application. So I guess in general, I just think it’s a really exciting time, an interesting time to be in tech. Things are moving very quickly, evolution is really being forced. There’s a lot of opportunity to succeed and to differentiate, and I’m just thrilled to be part of it and supporting our customers in reshaping the future of banking.

Michael Moser, American Banker (18:48):

Fantastic. Well, that’s all we have time for today. Sara, thank you for joining us to talk through this benchmarking data that’s critical for the success of banks and credit unions and really providing some great examples.

Sara Maaske, Blend (19:02):

Thank you, Michael. It was great spending time with you as well, and I just appreciated talking to you.

Michael Moser, American Banker (19:07):

And thanks to our listeners for tuning in. To learn more about how Blend can help you achieve your strategic goals of speeding up and simplifying account opening and loan origination, please visit blend.com.