Anyone who has navigated the loan application process, particularly for a major purchase such as a home, is well aware of the notorious mountain of paperwork required. But as technology and new regulations levy new expectations on lenders—not to mention the demands of speed and convenience by customers—paper-laden, traditional lending processes are becoming increasingly nonviable as a go-forward strategy.
Your bank is undoubtedly aware of the need to digitally transform loan processing—originate and close loans faster, drive greater efficiency, compliance and security, and deliver the fast, frictionless experience customers expect. Perhaps you’ve even taken some steps toward digitizing your operations, but are unsure what’s next? Have you missed something?
Consider for a moment where digital transformation might drive true business benefit for YOUR bank: Is it paperless processes? Digital signatures? Mobile capture capabilities? Back-office and compliance automation? Or all of the above?
No matter where you are in your digital transformation journey, these five best practices can serve as a guide for mapping and executing your unique strategy:
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Examine your current process
A thorough evaluation of your current processes—what’s working, and more importantly, what isn’t – is the first step of any successful digital transformation. Many banks find a process assessment workshop helpful. Experts in automation and digital workflows can help you identify strengths you can build on, as well as gaps or weaknesses that are causing inefficiencies (and perhaps identify areas of risk you hadn’t even considered).
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Choose a starting point
Deciding where to begin is one of the most difficult components of transitioning to digital. It’s helpful to ask yourself what your drivers for digital transformation are, particularly any pain points you’ve identified – perhaps an upcoming regulatory requirement, internal executive priority, awareness of a competitor offering, etc.
For example, perhaps you have identified an omnichannel customer experience as a primary driver. You learned that in one study, over half of the under age 70 respondents wanted the ability to research loan types/rates, apply for the loan, and submit or review documents through a digital channel. And a full 50% expected the option to sign a document without having to drive to a brick-and-mortar office to provide a wet signature[1].
Given this information, you might consider adding a mobile channel to gather required documents in the course of the loan application process and/or add the capability to generate documents for e-signature. This is where a platform that allows for a self-paced adoption path can prove essential. The ability to deploy capabilities on the timeframe of your business can ease implementation and help deliver a better ROI.
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Create an Enterprise Center of Excellence
It’s always a good bet to encourage an environment of expertise exchange and inclusion among business knowledge workers. The better your transformation goals are communicated across the enterprise, the more likely you will be able to depend on inter-departmental support. There will be hiccups along the way during any technology implementation; therefore, securing executive sponsorship and inter-departmental buy-in from the start can go a long way in creating an atmosphere of group investment and goodwill. Lessons learned from having visibility of peer missteps are an invaluable tool during the process. You can avoid making the same mistake twice, saving considerable time and increasing efficiency.
Opening up communication between silos is integral here. Many banks still have silos that do not communicate or have visibility into technology and efforts, which can create confusion. Remember: plan, socialize and adjust as needed based on new information.
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Create a plan
After you’ve gathered feedback and insights across your organization, you can begin to craft your plan. It can be helpful to ask the executive sponsor to take a leading role in communicating the plan, explaining how the plan objectives align with the company vision, and publicizing the “quick wins” that can deliver small, but consistent ROI. Ask for feedback from stakeholders, and be prepared to revise and revisit.
Also, don’t forget to look ahead: Always be thinking about where your next automation opportunity exists.
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Execute and expand
Digital transformation is a journey, not a destination. Evolving your workflow, expanding your capabilities within and across departments, investing in new processes—this is all part of digital transformation.
It can be invaluable to look at what other financial institutions are doing. For example, is a competitor implementing information capture and data aggregation, including electronic data? Or expanding information capture to include transformation? Maybe they are implementing Robotic Process Automation to help with KYC and compliance requirements. A vendor with experience automating and digitizing across the end-to-end customer journey can provide the strongest foundation and guidance as you grow.
Above all, ensure you think of your transformation plan holistically: emphasize automation from those first information-intensive customer interactions all the way through the back-office processes. After all, what good is offering a 5-minute digital onboarding experience if your customer must provide a wet signature at a branch office and then wait weeks for the paper-based, manual loan closing process to complete?
Ultimately, whichever expansion path you choose, keep asking: what will be the next generation of leveraging data to produce business value—and how can my bank capitalize?
For an in-depth look at best practices for digital transforming your bank, download your copy of this digital transformation white paper. For your own unique requirements or to learn about scheduling a process assessment workshop, contact us today.
[1] Consumer Lending: Understanding Today’s Empowered Borrower, PwC