Bankers and Loan originators burn up a lot of resources on attracting clients, especially Millenials, who may start the new account onboarding or apply for loans but never close the deal. But while some measure of abandoned applications may be unavoidable, businesses should continue to look within when seeking methods of improving the customer experience for onboarding and overall growth.
Onboarding or application abandonment can be attributed, at least in part, to errors or bottlenecks that crop up during application processing. Banks and financial institutions often find themselves in a no-win situation: While cutting corners on processing is a recipe for disaster, the oftentimes long procedures can cost them clients if it can’t accommodate a customer’s preferred timeline.
Onboarding and Origination Problems
Fortunately, there are other options to improve application processing in a way that bolsters your bottom line. Software platforms that centralized loan processing and client communications, alleviating some of the top pain points that lead to abandonments. Here are seven common problems that might be killing your company’s ROI.
1. Confusion Over Terms and Offering
Most people applying for a new account or loan aren’t familiar with account benefits loan structure, and even why they should choose your company over your competition. For these complex and advance “purchases,” Customers often need a banker or loan officer to explain basic features and benefits. Delays in communication can result in the customer losing interest—or, worse, turning to a competitor.
Address this pain point by providing multiple communication channels, including phone, video chat and/or text-based messaging, that enable real-time communication, and visualizations that can accelerate understanding and the application process. Focus on the customer’s experience of completing the required paperwork.
2. Delays in Completing Paperwork
Incomplete or missing paperwork can grind application processing to a halt. These delays on multiple fronts, including the lag time required to deliver paperwork to all parties, as well as delays in having that paperwork returned.
In certain industries, this delay can lead to missed purchases and/or acquisitions, or the customer might have simply changed their mind. It’s impossible to process documentation when the application materials aren’t in-hand, so banks and lenders should prioritize a system to collect this paperwork as quickly as possible.
3. Errors on Forms
Completed paperwork doesn’t necessarily provide a green-light for processing. Missing fields, inaccuracies and other errors caused by human entry are inevitable, and they have to be corrected before processing can proceed. In cases where a banker or LO isn’t actively in communication with the customer, these errors can cause a processing delay that increases the risk of abandonment.
Lenders should instantly communicate errors and have a way to directly interact with the customer where and when they can be reached and confirm data by having the customer instantly make changes to a digital form and re-verify their signature and consent on the changes.
4. Waiting for ID Verification
Gathering personal information, along with copies of government documents, can be a painstaking process. When companies hold firm by insisting on paper copies, they can create long delays that increase the odds of a lost conversion.
But most consumers have access to smartphones and cameras that can help them take quick, high-resolution pictures of the documents needed to verify their ID. Businesses need a system in place to quickly gather those documents from consumers, and seamlessly integrate into their CRMS and internal processes, expediting ID verification.
5. Gathering Signatures From All Parties
Getting everyone to sign on the dotted line is important, but parties may have conflicting schedules or be completing paperwork from multiple locations. E-signatures are a fast, secure way to expedite this process, enabling near-instantaneous document signing from anywhere in the world.
For customers demanding faster turnaround, e-signatures can accelerate the approval process without creating any inconvenience. Getting an e-signature instantly via a text-based communication platform bypassing cluttered inboxes, further reduces time and having to cahse your customer or third-party signatories.
6. Incidental Costs of Paper-Based Processing
If your company hasn’t gone 100% digital, reliance on paper and manual data entry creates additional costs that pile up over time. Consider the cost of buying paper and ink, as well as copying and shipping forms. Even when banks and financial institutions succeed in processing and completing the customer’s journey, these costs eat into a company’s profit margin.
If they have not already begun, lenders should implement a digital transformation of any process that requires paperwork. Paper documents, files, printers and faxes can be entirely eliminated with the proper technology stack.
7. Going Through Terms and Conditions Document
In the course of finalizing onboarding or loans, clients will likely want to comb through the fine print—especially if the application is business-related. To expedite, it’s ideal to have open lines of communication so that the lender can answer any last-minute questions that might otherwise trip up a quick, simple signing. Getting a consumer to take time and read through these terms and get tacit acceptance can become burdensome. If banks and lenders could send get a consumer to read and accept the T&C’s via smartphone, they will see an increase in efficiency and growth.
In today’s tech-driven world, streamlined processing is critical for any successful lending business. If your organization hasn’t yet digitized their workflows and application processing, it’s time to consider how such a change might benefit your lending operations, improving the efficiency, time-to-close and ROI of loan application processing. Over time, these additional closed deals will create satisfied customers who become a valued source of revenue for your business.