Money lending is a practice nearly as old as civilization itself, having been in existence in some form or another for millennia.
However, given the technological disruption of the past few years, now is the time for loan origination, the modern iteration of this centuries-old business, to get a complete digital overhaul. Without such modernization, the loan industry is apt to lose out to faster, sleeker, and more cost-effective non-traditional competitors.
"Digital transformation isn’t a voluntary process for banks," a blog post from turnkey-lender.com reads. "It’s the harsh new reality of the market that makes traditional lenders play catch-up. For decades banks had an overwhelming monopoly on the lending market. Times have changed as banks started to lag in terms of the online experience they deliver."
Here, then, are the top three reasons loan origination needs a revamp, along with a discussion of how digital solutions can deliver it.
Fierce Competition Calls for Digitization
In recent years, fintech companies have become the disruptors to watch in the lending space. With their anytime online service, broader consumer targeting, and user-friendly mobile solutions, they've quickly gained market share and customer hearts and minds.
"By observing and often experiencing first-hand what banks offer – or do not offer – new entrants are targeting segments that need to most urgently focus on the customer. By developing narrowly defined, but highly effective solutions, they have managed to step into and take over segments neglected by traditional banks in terms of offerings."
Among the attractive offerings that traditional loan-origination players have been reluctant to offer are online application and approval and digital documentation services, which allow end-users to both upload and download essential loan documents and agreements without the hassle of paper storage.
Loan Origination Begs for Better Decisioning
By using digital loan origination services, lenders can start closing some of the gaps between themselves and fintech newcomers in the market. Ripcord's loan origination solutions, for example, allow lender organizations to offload the often-monumental burden of handling, filing, organizing, and storing key paper documents.
Using our vision-guided robots, artificial intelligence, and machine learning, Ripcord solutions digitize and enrich an organization's documentation so it's all stored tidily and securely in the cloud. Coupled with Ripcord's in-tandem automation of manual tasks, digitization frees personnel for higher-level tasks so the creativity and critical thinking that can come only from human beings are allowed to soar. The end result: quicker, better decision making, which leads to less waste, more productivity, and clients who get answers sooner.
Happier Clients Spur Business Growth
With traditional lenders lagging in the digitization arena, digitally mature fintechs have begun pulling ahead in one area in particular: customer servicing. In fact, 90 percent of fintechs say their customer service is what gives them an edge over banks, according to a report by Capgemini and LinkedIn.
Traditional lenders can get in on the better-customer-service game, however. With digital loan origination solutions, traditional lenders can give customers more of what they want today, not what they wanted decades ago. Now consumers want to be able to shop for deals, engage with companies, and problem-solve online at the time and day that suit them, not during a lender's brick-and-mortar-store business hours.
Ripcord's digital loan origination solutions allow for just that. Its AI and machine learning capability mean that the more data you put into the system, the smarter the system becomes. Data enhanced and enriched by AI helps to unearth insights that lead to a more intelligent decision-making process that aligns with nascent customer needs. That means lenders can begin offering customers more tailored online suggestions and help clients better navigate the loan process -- faster.
The net effect of these moves toward digital maturity is a better customer experience, which, in turn, leads to revenue growth for lenders. Digitized document management is a win-win situation for all involved.
We're on a mission: to digitize the world, one industry at a time. Using vision-guided robots, AI and machine learning, we digitize, enrich, and organize your most important paper documents, no matter what the volume. Get more information about Ripcord today and see how we can help your loan origination services reach digital maturity.