Digital efficiency and instant decisions – mapping out a route to responsible lending

The whitepaper - Future Proofing Consumer Finance: How to Create a Resilient Service Model - from UK-based fintech Quotevine, which is downloadable from their website, details how firms can create a resilient service model, with practical details on essential components for the digital customer journey at the point of acquisition.

In a period where lenders have withdrawn products, tightened credit criteria, and adopted conservative lending levels during a second lockdown, (in many cases competing for the same customer demographic), the white paper explores how lenders can harness stronger, value-driven relationships with customers.

Focussing in parts on streamlining the digital journey, the white paper comes at a time where the global pandemic has pushed millions of customers to make their first-ever digital transaction, while others are ramping up their use of online banking.

This trend is only set to rise further, with hundreds more bank branch closures over the next 12 months announced by TSB, NatWest, Co-operative Bank and HSBC.

Meanwhile, the white paper emphasises, UK e-commerce sales have risen by 10 percentage-points as a proportion of total retail spending.

As the pandemic has accelerated a mass switch to online transactions for almost every part of daily life, and raised the bar of customers’ expectations of online journeys, the white paper warns that for those firms not working with online loan management systems, this transition will require “rapid investment in tools that enable the online promotion, delivery and management of consumer finance products.”

Solutions for modern expectations
As the white paper points out, the challenge for many firms in the digital era will be how to “balance experience and efficiency”.

Speed is now a key determiner of customer service levels, with 87% of online shoppers likely to abandon a purchase during checkout if the process was too difficult, according to a study. Financial services firms are facing up to similar expectations, where every part of the onboarding journey will have to be fast, easy and frictionless.

To enable such a journey, the white paper argues, firms must streamline their credit process, shifting from “two to-five-day processes to instant decisions”, for both existing and new customers, just to remain competitive.

But doing so while assessing credit-worthiness, and perhaps in some cases, analysing the resilience of new customers to withstand the impact on their incomes of a fragile economy through 2021, will require significant investment in technology that “streamlines the sales and assessment experience.”

The white paper adds: “For firms, an efficient and smooth digital distribution engine will be a key element in the battle to retain and gain market share as customers prioritise experience and simplicity of service.”

Practical elements of what this entails for lenders, the white paper states, should include a user-friendly sales cycle that helps “customers feel in control.”

First steps in the journey should also include the provision of clear guidance on approval criteria, including what documentation they need, it adds.

Real-time data reaction
In a period where prospective customers’ circumstances can change day to day, capturing, organising, analysing and reacting to data fast, will be vital in the next year.

Quotevine’s white paper states that aligning this with a digital sales model will enable firms to not only streamline their sales process, but also improve the quality and availability of customer insight “at every stage of the customer lifecycle”. To achieve this, it adds, all data capture opportunities must feed to a centralised information management platform, such as a cloud CRM system.

With the other elements, this management and harnessing of data, forms an essential pillar of meeting modern expectations.

The full white paper is available on Quotevine’s website.