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Driving consumer lending efficiency in an Omni-channel environment

The shift of business models from “physical” to “digital” has only scratched the surface in the lending universe. Notable financial institutions (FIs) are able to adapt to market changes by optimizing lending practices, ensuring consumers faster and more efficient interactions throughout their digital lending journey. Most borrowers prefer the luxury of options, application processes accommodating both digital and human capabilities to guide the customer experience while seeking a loan.

FIs can achieve a competitive advantage by processing loans in an Omni-channel delivery ecosystem. This is driving financial institutions to seek lending options with the ability to prospect, originate, underwrite, process, and close secured and unsecured credit cards, lines of credit, and installment loans in an Omni-channel environment.

Also, incorporating technology that converges configurable criteria to automate decisions in real time within the lending process and meets compliance requirements by systematically enforcing regulations and internal business rules elevates top lenders above their peers. FIs who want to remain competitive in the lending market must optimize their consumer lending software to balance technology-driven automation with human resource utilization, resulting in reduced cost and a world-class customer service experience.

Consumer Lending Through Digital Channels is Fraught with Risk and Inefficiency

Utilizing digital channels to serve borrowers will leave your institution vulnerable to fraudulent applications and data privacy concerns. A combination of increased volume and poor application quality creates an insupportable flow of requests, making digital lending viability questionable for the traditional credit process. In addition, digital lending, from origination to collections, typically involves banks collaborating with third-party fintechs, exposing borrowers and institutions to new and heightened levels of risk.

More cost-effective processes and decision models are needed to address sinking qualification ratios associated with online lending – models that employ analytics and automation to decline, decision and refer applications appropriately to maintain profitability, mitigate risk and not overwhelm lenders. Leveraging human and digital channels when servicing borrowers allows lenders to eliminate margins of risk and inefficiency in real-time.

Mitigate Credit Risk and Increase Staff Productivity with Technology

With rising customer demand, FIs today are working towards increasing productivity. Technology simplifies loan origination workflow by guiding customers and staff members through each step in the process. Many institutions are streamlining operations by using software automation to eliminate errors and alleviate tedious tasks such as multiple instances of data rekeying. 

Automated decisioning drives down denial and underwriting costs resulting in an increased focus on more profitable, qualified candidates. Decisioning analytics evaluate areas such as credit quality, borrower stability and collateral risk. A decision and rules engine applies industry standards, institution-specific rules and policies and custom attributes such as credit report analysis for automated decision support during loan origination.

Automated solutions assist staff in providing speedy decisions to meet customer expectations while also seamlessly meeting compliance standards. Such solutions increase employee productivity by providing consolidated customer information and loan details for a 360-degree view of the overall financial relationship and deal structure. Bank associates can manage and expand relationships and target product recommendations aligned to customer needs. Delivering these capabilities with an Omni-channel approach facilitates data collection in both digital and staff-assisted channels by following a step-by-step process based on attributes such as loan type, product, jurisdiction, borrower and loan structure.

An Omni-Channel Consumer Lending Approach

Financial institutions gain a competitive advantage by employing technology and analytics to process loans in an Omni-channel ecosystem. Digital functionality allows applicants to shop and compare loan options, submit loan applications, and receive real-time automated decisioning and status updates. Paperless processing comprehensively automates document handling, removing dependencies on paper. This improves customer experience and strengthens compliance. When FIs merge high-tech advantages with human touch, they create a friction-free consumer journey that accommodates every need through a customer’s preferred channel.

FIs also have the opportunity to leverage a third-party origination credit portal as an extension of their LOS to compete directly with fintechs. This capability affords the FI the opportunity to meet the customer directly in the buying moment. 

An Omni-channel ecosystem provides seamless start, save and resume cross-channel application processing throughout every customer journey stage. This enables a prospect to begin the research and application process on a mobile device, continue the application and upload documents on an alternate digital device, and engage live assistance from contact center or branch lending specialists without losing progress. It provides full event transparency, creating a seamless customer experience across the application process.

Benefits of Omni-Channel Consumer Lending

FIs’ ability to serve potential and current borrowers across numerous channels, allowing them to start, pause and resume applications without starting over, comes with myriad benefits. For example, digital optimization increases accuracy by eliminating data rekeying, which reduces errors and oversights.

Customers and staff members are guided through each phase, improving customer engagement by triggering staff actions and automating workflows. Digital capabilities, intertwined with human engagement, increase staff productivity and efficiency through analytics and workflow. The Omni-channel approach balances technology and human resource allocation based on customer need type and complexity. Bankers can provide faster decisions on applications in an Omni-delivery ecosystem, equipped with 360-degree customer visibility to manage and expand relationships and target product recommendations aligned to customer needs. 

This technology uses configurable criteria to either automate decisions in real-time or have the loans manually reviewed by underwriters if warranted. By applying decisioning analytics, FIs strengthen governance, risk, and compliance by establishing consistent processes aligned to regulatory requirements. Omni-channel delivery environments drive high-value loan origination processes that increase the ability of institutions to meet customer needs while providing a seamless lending experience for borrowers and lenders.

As Senior Vice President of Business Development at ARGO, Todd Robertson works with over 500 banks to transform customer experiences and improve operational efficiency.

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