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Improve the Customer Experience from Loan Origination System

Improve the Customer Experience from Loan Origination System

Digitalization has takes the control of the lending industry from so many years in so many aspects, that banks and NBFCs don’t have much time to address each one. A essential aspect of lending, User experience can make or break the loan origination process for lenders. Even in a highly advanced digital technology, customers struggle to cope with shifting landscapes in the lending marketplace. The reason is plain and simple – digitalization is not working all the industry. While some banks and NBFCs have to raise the cost or price in ushering in more digital lending initiatives, particularly after the COVID-19 pandemic crisis, others are still reeling.

Drawbacks of Customer Experience

older and some current loan origination systems have particular user experience-that are related to challenges that have plagued the banks and NBFCs that deploy them. Here are the main pain points:

Ineffective Management of Documents:

Some lenders in India have still not adopted paperless or at least partially paperless loan origination, and expect multiple branch visits from customers. Even with e-KYC and v-KYC initiatives, lenders still struggle to get document management streamlined.

Difficult Usability:

Nower days, most of the customers and borrowers tend to have direct interaction with loan origination systems through the web forms and lending apps. User-interface design is an important component of a customer’s onboarding experience that lenders could easily get wrong. From a bad condition and old-looking homepage to complex input fields, usability is a massive challenge.

Irregularity of Omnichannel Lending:

Digital lending has many obstacles of servicing modes – lenders offer loans through the website, email marketing, and mobile apps. But this has also faced some problems in features/services offered between platforms, which causes friction with customers’ user experience.

  • Shortage of Self-Service Options:
  • Whether it’s doing e-KYC from the comfort of your guardian, or getting information about your loan application through chatbots, numerous banks and NBFCs are yet to implement self-service options begin across their channels.

  • Speed, Downtime & Maintenance:
  • Not updated and non-transparent loan origination software can really affect your growth in new customer acquisition. For lenders who placed a large number of field agents, it becomes necessary to have a speedy system that doesn’t take much time and requires little maintenance.

Many ways to Improve the Customer Experience

Customer experience in loan origination is an important point that can help to get more loyal customers and attract new ones. There are many methods by which Customer Experience can be better.

1. Requires Smart Collection of Data & Analytics

Understanding customer requirements and thinking patterns is the major step in improving user experience. For this, all the information of the customers need to be collected through data points like mobile apps, website visits, clicks through search engine optimization (SEO), etc. Information like previous lending activities, credit scores and loan profiles can even be noticed through loan origination softwares for the better understanding of customers’ spending and repayment habits. All this data with Smart Data collection & analytics solutions available on loan softwares, and you have the platform to give a great customer experience.

2. Adoption of New Technology

Rules & Regulations for banks and NBFCs are getting higher, driving up the cost of borrowing. In this situation, it helps if all these companies can adopt business and operational models that are offered by new technologies. By control the capabilities of Artificial Intelligence (AI), Machine Learning, NBFCs can reduce their customer acquisition costs, takes the step to make less risk for existing loan portfolios and create a good services for customers. Using frameworks like Angular and React, NBFCs can offer a better experience for customers.

3. Providing Self-service with Customer Support

In the growing lending sector, self-service is becoming more and more suitable for borrowers. Manual support is tedious; the customer service team member must call the client to guide them through the loan application process, while online chat solves such problems instantaneously and efficiently. Chatbots, self-service kiosks at banks, live chat on social media platforms like Whatsapp, Facebook, etc are the main sources for lenders to attract new customers. Although these are non-traditional solutions of customer support, lenders must expand their service channels to include self-service for millennials and digital natives. Customers downloading loan sanction letters directly from their mobile/web app or through chat. Such conversational technologies are changing the lending landscape to device actionable insights and supercharge client interaction in real-time.

4. Streamlined Multi-channel Experience

Today’s loan origination process is implemented across various channels – there are customers who selects coming to the financial institute’s branch to get their in-store experience, others love online banking done through their mobiles, laptops and tablets, while customers only have to touch a few buttons on their phone apps for the complete banking experience. Most lenders use a mix-and-match of these channels for developing, which although required, can sometimes lead to some problems. It’s important for lenders to streamline their product offerings and processes across all the sources for a better experience for their customers.

5. Personalization of the Customer Experience

Everything is being equal, customers will always prefer a lender who personalizes their experience. This doesn’t only mean offering the right kind of product or right information for your customer’s requirements; personalization which includes timely and communication between the customers, configuring the products based on the customer’s credit history and reducing paperwork/documentation for current clients. Eg. Language localization (Hindi, Tamil, Marathi, etc.) based on the GPS location of the borrower. Entrepreneurs/self-employed individuals would also get same product offers based on their business needs, and their loan origination flow will also be different.

6. Security, Transparency and Trust

In a digital world where Artificial Intelligence and big data are the important feature of technology, data security has become a big eyebrow-raiser. The more secure your digital lending endpoints are, the more patience of your customer has. Another way of getting more customers is by maintaining transparency in your loan terms and conditions, and ensuring that customers fully understand the terms and conditions. As long as the product/service meets the customer’s expectations, they will get a more trust in the lender and are bound to come back in case of any further requirements, or there is a chance of referring their associates to the lender.

7. Better Understanding of the Customer Journey

Providing the customer a great loan origination experience is one thing, but to do it consistently, you needs to understand the customer’s journey.

Conclusion

Be it a personal, a business loan, a gold loan, or a mortgage loan, giving customers a good user experience is now a priority for banks and NBFCs alike. It’s true that digital loan origination has reduced the costs, improved efficiency and mitigated geographical challenges, but business sustainability will only be attained if lenders can perfect the art of Customer Experience.

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