Self-service lending platforms are one of the most effective ways that banks and credit unions can compete with megabanks and fintech. With 40% of the nation’s assets controlled by the top 5 banks in the US and the low-cost structure of fintech, competition for the remaining assets is cutthroat. This is where self-service lending and servicing platforms have allowed select banks and credit unions to shine by better serving their customers and building connections that keep them coming back time and time again to their business. 

However, there are several pitfalls that financial institutions need to avoid when adopting a digital, self-service platform so they can reap the rewards of their investment.

In this blog post, we’ll share the three most common mistakes that banks and credit unions make when evaluating and implementing lending platforms. With these key points in mind, you can craft stronger relationships with your customers and make them choose you over your competitors every time. 

Main page 3 3

Prioritizing visual enhancements

For many financial institutions, the only ongoing interaction they have with their borrowers is when the borrowers log into a basic portal to make their monthly payment or call the customer service line for another need. But since the finance industry has been reinvigorated with a priority on customer self-service, many institutions have looked for opportunities to improve, deepen, and multiply their interactions.  Some banks and credit unions, however, have confused customer self-service with visual enhancements to the customer interface.

It could be hard to find someone who doesn’t want to use a sleek website or interface, but many of the changes that financial institutions are making to their lending or servicing platforms, or the ones that they’re choosing to implement, are actually burdening their back offices and as a result, making their operations inefficient—which hardly solves the problem of a frustrating and clunky borrower experience.  This is the equivalent of curb appeal in the real estate industry where a pretty exterior may mask much larger problems.

Not ensuring connectivity between the customer interface and back office processing

For a large majority of customers, the thought of calling into a customer service line brings dread. From waiting on hold to finally speak with a representative to not having a problem solved right away, there’s enough reason for customers to altogether avoid a bank or credit union that still depends on phone calls and go with a competitor. 

Financial institutions, fortunately, have started to address this borrower pain point, partly because they’ve also realized that answering these calls ties up their employees with tedious manual tasks. MOM2RES, or moment-to-resolution, measures how fast an institution can resolve a customer conflict or request and should be a driving consideration behind a self-service lending or servicing platform. Theoretically, by shifting to self-service, banks and credit unions should enable their customers to resolve their requests more quickly from beginning to end - not just with an intake form online. A hardship relief or due date change request that would traditionally take hours or days to manually fulfill can now be done by the borrower themself, in only a few minutes.  This only works if the process is automated end-to-end so the borrower benefits by a faster turnaround time.

However, faster customer turnaround through self-servicing can only be unlocked with connectivity between the customer interface and the back office processing, which refers to business activities that don’t directly involve customers. Connectivity will ultimately free up your employees from error-prone manual work and make your operations more efficient so your customers can get what they want, when they want it.

Not creating opportunities for customer feedback

With 75% of mortgage borrowers leaving their original lender for a different one when refinancing, customer loyalty is a bigger challenge than ever before. Providing a powerful and efficient self-service lending platform is one of the best ways to craft an improved borrower experience, but if you’re not giving your customers the opportunity to give feedback, you’re missing out on a competitive advantage.

Customers want to be heard and listened to by the brands they choose more and more. This is not only one of the best ways for financial institutions to forge a deeper relationship with their customers but also gives them an opportunity for greater efficiency and less risk. After all, complaints—the voices of the customers—are the best indicators of where customer pain points may exist and where there may be exposure to regulatory, reputational, and consumer harm. All of these aspects should be considered when adding self-service features so midsize banks and credit unions can truly wield a competitive edge over megabanks and fintechs.

 

Give Your Borrowers What They Crave with Constant.

Constant helps midsize financial institutions compete with megabanks and fintech with digital borrower loan portals that go beyond basic loan payments—without replacing your current core platform. Our smart automation gets rid of manual, time-consuming approaches that frustrate your customers and hamper employee productivity. 

Schedule a quick demo today to see how financial institutions across the country are delighting their customers with Constant AI.

 

Schedule a Demo