Think Strategically when it comes to Online Lending
You have an online lending solution – that’s a start. Consider these questions about your current online lending solution...
- Does your online lending solution render decisions automatically?
- Can you customize your decisioning criteria for an optimized portfolio?
- Is it integrated with your internal loan origination system?
- Do you have a full-service call center to parallel the 7x24x365 service expectations of online business?
If you answered no to any of the above, read on.
Introducing “lending nirvana,” a four step process representing the ultimate in online lending. The four steps of lending nirvana can give your credit union increased loan volumes, less manual labor, better backend process and more – blissful benefits indeed. Your membership reaps the rewards as well: superior online lending means their loan is reviewed within 30 seconds of submission and they can get their money asap. No muss, no fuss and no waiting.
The four physical steps to lending nirvana are:
- Unifying the front end experience and point of sale
- Best of breed decisioning technology
- Digital authentication
- Automated fulfillment.
Today, our focus is on step one: the unification of the front end experience and point of sale.
Unified Front End? Just Call it “Service”
As a cooperative organization, you know that service is a major expectation and one of your greatest points of difference from other financial institutions. By providing the same exact experience across all points of entry – phone, web and online – you establish and reestablish trust with your membership. From loan application to the disbursement of funding, your goal should be sameness.
According to Digital Insight market experience, just four years ago, only 10% of loans were generated on the Internet, with 90% coming from call centers. Today, it is 75% web origination, 25% call center – a huge shift. But 25% is nothing to sneeze at: you need to meet the demand of these anytime callers. As part of its offering, your online lending service provider will have a call center available so that when your call center closes, theirs opens up, offering a seamless transition to 24/7 service without skipping a beat – and without members’ knowledge of outsourcing. These call centers typically charge per loan, although minimum charges also apply.
This unified front offers myriad benefits to credit unions too. No redundancy. Faster loan decisions. Less manual labor. More placement of your intellectual capital on things other than writing and rewriting underwriting guidelines (more on best of breed decisioning technology next month). Now it’s time to talk about the other half of lending nirvana’s first step: marketing.
Tap into the Marketing Power of Point of Sale
Your online lending service provider should work with you to “get the word out” regarding your online lending services. The key, first and foremost, is to engage your employees – both front and back office -- in any and all changes. Once the custom lending application is defined, be sure to conduct sales training for front of house staff, and processing training for back of the house staff. Your online lending service provider will have training modules and consultants available to make this step easy and even enjoyable.
One credit union not only conducted highly effective training about their online lending program, they actually made it fun. Dubbing 2004 “The Year of the Loan,” NSWC, a 24,000 member credit union out of Virginia, asked their employees to wear pajamas to work on ‘Robe and Slipper Day’ to illustrate how their members could apply for a loan any time, day or night -- even in their pajamas! Almost immediately, 40% more loans were coming in online, and by the program’s end, 50% of all loans were coming in online. Walk-ins decreased and phone applications dropped from 28% to 14%.
Using the online channel is the most obvious way to promote online lending. Whether you send out e-newsletters, periodic email alerts or simply post attention getting banner ads on your home page, your service provider will partner with you to customize a results-oriented, effective online marketing campaign. You can also offer slightly lower interest rates to promote online lending. Finally, your service provider will help you automatically populate loan applications for existing members, a simple way to gain trust and promote security.
Next month, join us as we discuss step two of lending nirvana: best of breed decisioning technology. For more information about the topics discussed in this article, contact Digital Insight at: 888-344-4674, option 6.