Ten years from now, filling in an online loan application might be a thing of the past. Lending will not only get optimized for enhanced customer experience, it will become more straight-through and fast. Financial Institutions of today must remember that change is the only constant. Lenders need to optimize lending processes for faster disbursement of services and agile adaptation to market changes. The future belongs to those who will be able to master the art of agile shape-shifting in this dynamic market.
Most FIs have investments in legacy and core banking systems across CRM, Underwriting, Risk Management and other areas. These, in silos, create bottlenecks that delay the delivery of services and prohibit agility. The ability to adapt to changes and reach the market quickly are imperative for building Lending processes of the future!
Why a Point Solution is Insufficient
The Need for Agility
Buying an off-the-shelf point solution is ineffective due to the rigidity and overly standardized processes. Their inflexibility is a bottleneck, when it comes to coping with a dynamic market and compliance needs. Financial Institutions need to be able to make changes fast, without having to undergo large TCO of the ‘build’ approach.
Further, buying a readymade point solution can sometimes lend you a faster deployment. However, it comes with the baggage of standard feature set, reliance on vendor, and overall technical burden of change. This becomes counter-productive to the overall objective of speed, and is the key bottleneck for lenders today as they are stuck with these siloed and rigid point solutions.
A framework based approach, especially based on a BPM platform, with the ability to model-implement-deploy-execute in faster cycles provides the flexibility that is much needed for agility today.
Reaching Customers Faster
Lending processes need to be optimized to ensure faster disbursement of products. Let’s analyse the aspect involved herein-
Straight Through Processing
Customers expect a fast response, and contextually correct action. It is easier said than done, though. This requires a process mind-set, supported by a flexible workflow driven platform, with the ability to delink business rules from the transactional aspects of the process. Customer data, customer documents and collaterals, lending policies and rules, risk management policies and regulatory compliance aspects need to work in conjunction without forcing rigidity.
Building a Responsive Organisation
Lending is a complex and people-intensive process. People in your organization are responsible for decisions that involve a variety of factors. In order to be effective at their job, they need all the relevant information in time and in the required form. They need to use their time to do what theydo best, and not on mundane repetitive tasks.
Financial Institutions require a business rules management based technology that facilitates straight through processing of repetitive tasks, resulting in immediate processing. This would help the workforce stay motivated and empowered. This helps deliver better customer experience and more innovative products over time.
Mobility provides you an interface, but for it to be effective, it should be a natural extension of the lending process. A truly mobile interface facilitates capture of information and documents through a mobile or any other interface, on-the-go reviews, approvals and monitoring.
Mobility should be treated as a productivity enhancer and a key aspect of a great lending process. An omni-channel and cross-channel experience is critical for mobility to be effective. Your Relationship managers should be able to expedite the process by capturing customer information and documents on-the-go for a smooth credit origination.
Commercial lending processes are prone to emergent and exceptional scenarios. Exception handling is about flexibility and knowledge worker empowerment, ad-hoc routing and flexible processes. The ability to carry corresponding documents & media items, such as photographs, scanned copies, signatures through the process offers a significant advantage. Further, the delivery of timely customer communication throughout the process is imperative to keep the customer informed about the status as well as additional requirements of exceptional situations.