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Digital Lending Redefined: 7 Essential Steps for an Optimal Future-Ready Digital Lending Experience

Digital lending brings banking and lending enterprises significant benefits like better decisions, personalized, multichannel customer experience, risk mitigation, and dramatic cost savings, all while lending at scale. Lenders are seeing accelerated digital channel revenues, some by even 4X.

John Davies still remembers the time when he had to apply for a personal loan 5 years back. “I had to take time offs from my work, do multiple rounds at my bank, submit tons of paperwork and wait for weeks for an update”. Today though, John can get the credit he needs in a few taps, anytime, anywhere.

Digital channels are increasingly becoming a shopping window for a lender’s products and services. The last 2 years have increased customer’s appetite for digital products. It has certainly been so for digital lending.

Infographic showing the rise of highly automated lending processes in banking and lending institutions, with a statistic of 65% or more

Banking and lending C-Suite leaders who are looking to modernize and transform lending should look for opportunities that deliver tangible outcomes early in the transformation journey.

Here are 7 steps that will help you modernize digital lending, while achieving the desired outcomes of improved customer satisfaction and product, service quality:

1. Deploying hyper-automation

Enabling hyper-automation to eliminate duplicate data entry or prepopulating borrower information from multiple systems can deliver quick wins in seamless application, information capture and speeding up identity verification process.

Loan hyper-automation initiatives are accelerating improvements in productivity, from loan application completeness to automating spreads to speed up underwriting. This translates to efficient loan origination with minimum to zero errors, compliance risks and quicker decisioning.

2. 24X7 omnichannel accessibility

Deliver upgraded lending experience by capturing applications from the website, mobile apps, SMS, phone calls, missed calls, TAB, Branch, ATMs, KIOSK, Business Correspondents (BC), Business Facilitator(BF), Direct Selling Agent (DSA), online lead aggregators and more. By enabling access to credit solutions in any channel, anytime, you are delights customers who expect speed, transparency, payment flexibility, and convenience.

3. Personalized credit offers

Banks and lenders lower their lending costs with automated, AI-driven risk decisioning, with an actual less operational cost base. They then transfer the cost benefits to customers with personalized pricing, a micro-segmented approach based on borrower features, habits, and more.

4. Instant decisioning, with automated underwriting and faster disbursals

Lending leaders are enabling end-to-end, instant decisions with AI/ML-driven models. Instead of one-off analysis, models analyze the risk in each customer transaction, thereby giving a holistic risk profile, translating into wider coverage and inclusion. Hyper automation automates identify verification, and validation, and smart, configurable business rule engines backed by automated underwriting allow for disbursals in minutes.

A leading bank in Asia, through algorithmic risk analysis of transactions and automated underwriting, lowered credit delivery time by 90%.

5. Enable AI-driven lending workflows

Lending leaders are using highly configurable lending workflows by creating intelligent, customizable journeys. These journeys are powered by AI/ML models. They can enable hyper-automation through robotic process automation (RPA) for speeding up operations, reducing operating risks, and keeping cost to serve within tight limits. Drag and drop designers help create complex, parallel processes, offering significant advantages to banks and customers alike.

Leading banks are revolutionizing their digital lending with AI-driven lending workflows, bringing “time to approval” down to less than five minutes, and “time to cash” to less than 12 hours.

6. API Driven Ecosystem Connectors

A critical capability of a modern lending platform is to have an open API-driven ecosystem. Leading digital lending platforms have 90+ ready connectors to fetch, extract and utilize data from various systems including the National ID system, Tax systems, LOS, credit card, core banking, credit rating bureaus, social and more.

Lenders create an end-to-end lending experience by leveraging multi-app capabilities with restful web services which can share data with any external application and support 2-way bidirectional integration.

7. Paperless documentation

Digital lending platforms enable a paperless digital lending experience by integrating seamlessly with existing systems with best-in-class encryption and data privacy. For the convenience of customers, lenders are enabling easy document uploads, fetching, auto-filling and data extraction with OCR capabilities.

In a digital-first world, the lending landscape is witnessing a paradigm shift toward digitization and automation.