All aspects of banking are going through a remarkable technological evolution. Customers are clamoring for all things digital, from making deposits to easily paying the babysitter. Small business owners are not immune. They are now starting to demand that their bank embrace technology after seeing the benefits that come from an accessible, digitized lending experience online, thanks in part to the technology being utilized by modern banks and alternative lenders.
Here are seven costly mistakes banks make with their current loan applications:
1. Your loan application process takes too much time.
Does this sound familiar? Your potential borrower drives to a branch to pick up a paper application, fills it in, realizes he or she doesn’t have all the information and leaves the bank, returning the application to the branch days or weeks later. Your team looks it over, and there are still missing documents, so the whole process from beginning to end can take weeks and sometimes months.
It’s a universal struggle in lending. With the correct technology, the documents your staff needs can be uploaded easily online, automatic reminders can be sent to the borrower for missing documents, and when terms are offered the technology will automatically request the documents your bankers need. It’s amazing how much time technology can and will save your team.
2. Your applications are still only on paper.
It’s a risky business when your prospective borrower goes to your website to apply for a loan only to be met with a prompt to “contact us to apply.” Your most eager customers will call but who knows where everyone else will go? Are you losing business to alternative lenders? That’s a possibility.
3. You need to reduce the workload for your team.
Let’s be honest. Your staff wears many hats in today’s modern bank branch. More and more branch managers are having to chase after documents for small business loans. Take the burden off the team and let technology do the hard work. Look for technology to utilize automation to request missing documents via a secure portal and let your managers get back to what really matters: providing great customer service.
4. Your bank needs to conform to the Americans with Disabilities Act (ADA).
Is your current application accessible to the blind or those who have low vision? An interactive pdf that your borrower can fill out and send via email will no longer be acceptable as those forms are often not accessible to blind people who use screen readers. Your bank needs technology that has created software that exceeds current standards and requirements for accessibility.
5. Reporting and analytics take too much time.
You and your team need a transparent workflow. When your team has the analytics and the ability to track how many people are viewing, starting, and completing your application, your team can do a better job of forecasting the week ahead along with creating targeted marketing campaigns.
6. Your bank struggles with data.
Creating, storing, and using data will become more and more important as new regulations are created. Use technology to your advantage and gain a significant competitive edge through automatic reminders to complete applications and the ability to gather data for retarget marketing.
In addition, reduce risk and time spent rekeying information by having a central location for data. Your goal should be to have the borrower enter their information when they are ready. No longer would your staff have to waste valuable time rekeying information from paper.
7. Communication within the bank is less than stellar.
You are ready to make internal collaboration easier and knowing where each loan is in the process gives visibility so everyone on your team can stay on track and know what’s coming their way, helping facilitate cross departmental communication to accelerate the loan’s end-to-end time.
Increased efficiency, profitability, productivity and enhanced customer experience are all reasons why digitizing your loan application should be a top priority for next year. For example, in most banks, the administrative and overhead costs to underwrite a $50,000 loan and a $1 million loan are essentially the same, making $50,00 loans less attractive to the bank. Simplifying the process and achieving greater efficiency may grow your loan volume as well. It’s time to make the shift from traditional applications and revolutionize the lending experience for your borrower.