Imagine that bank branches are closed, on-site consultations are cancelled and all bank customers want to take out loans. How would you react to this challenge? Let’s remain hopeful that such a scenario will not occur.
Recently, however, the banking industry has actually found itself in an unprecedented situation. Loans are often critical to cash flow, as they keep liquidity moving. The quicker and less bureaucratically loans are granted, the better, especially in these times. Sending documents manually is too slow, inefficient and even questionable from a data protection perspective. Personal appointments are hardly possible. Lending is in desperate need of a digital remake!
However, a lending crisis isn’t necessary in order to foster innovation. Lengthy, manual loan applications have caused a headache for many bank customers, and not just since yesterday. Customers are now accustomed to convenient, digital processes in an increasing number of areas in their lives. Loan applications are often an unattractive leftover from analogue times, even though more and more banks are striving to drive digitalisation forward.
From a customer’s perspective, a solution is becoming increasingly urgent. In an analysis of real, anonymised bank data, we recently noted a significant increase in the need for fast loans, especially for business customers.
How do you respond to these customer needs today and in the future? And how is the loan application process already becoming scalable and digital? What can banks and lending institutions do right now to offer customers fast, uncomplicated loans? In this blog post, we show you an easy way to help your customers with a fast, unbureaucratic and digital loan!
What Can Banks and Credit Institutions Do Now to Offer Customers Fast, Uncomplicated Loans?
Traditional lending can take weeks to months, which is precious time that customers simply do not have. The digital loan application process, on the other hand, is completely digital for both applicant and lender, reducing the processing time to a few seconds. This is made possible by the extraction and analysis of excellent data that is made available as part of the loan assessment process, enabling a fast, secure lending decision. Customers are pleased with the immediate loan decision and the easy application process, without the need to send in documents or arrange appointments on site.
How Do Loan Applications Become Digital and Therefore Scalable?
Banks and lending institutions do not need to invest much time or money into developing a digital loan application process now. The technology is already there and the simplest way to offer your customers a digital loan is to work with technology experts.
With the Digital Credit Check, FinTechs have created a product that enables a low-risk assessment of creditworthiness in real time. The creditworthiness analysis of the applicant is based on real information that is updated on a daily basis. For this purpose, data is extracted, analysed, made usable and evaluated for risk management. As part of the Digital Account Check, the latest technology guarantees excellent data quality. This enables you to make the right decision quickly, offer loans to more customers and also convince them with a convenient digital application process.
How Does the Digital Credit Check Work?
The Digital Credit Check is based on the Digital Account Check (DAC), which accesses the consumer’s online banking information in real time. From a technical perspective, this is made possible by accessing the consumer’s online banking account (XS2A) via an interface to the account-holding bank. With the customer’s consent, this data is used for the lending decision and thus optimises the conventional procedure of checking creditworthiness.
Access to real-time financial data is the cornerstone of successful digitalisation in the financial sector. Read our free white paper to learn how new products via a banking API drive digital transformation and inspire customers.
Digital Lending Improves the Process for Banks and Lending Institutions
A digital loan application is more than just a reaction to customer demands. Employees at banks and financial institutions have to spend valuable time on manual or only partially digitalised processes for granting loans.
Processing steps, such as printing out documents sent by email for credit checks, are very cumbersome. Checking account statements and salary statements sent by fax or post is also nerve-racking and time-consuming.
Every additional manual step is a potential source of error and means less freedom for employees to do more important tasks. By contrast, digital lending reduces costs and risks along the entire lending process. The current crisis is merely a catalyst and will accelerate the necessary digitalisation that has been on the agenda of the financial world for several years.