In the last 12 months, the commercial banking space has been forced to grapple with a hurdle of changes, from pandemic shutdowns, to the Paycheck Protection Program, to now signs of reopening. Throughout these shifts, a key emerging theme has been the acceleration of digitization within the banking space. Changing consumer habits that have quickly forced other industries to reform their solutions are now reaching banks and their consumers alike.
Each year, our friends at Barlow Research host their annual Business Banking Conference —a two-day event that unifies banking and fintech thought leaders from across the country. On May 18th of this year's fully-virtual event, our CEO Dan O’Malley and Head of Bank Products Carrie Asprinio, were able to dive into the key trends of this past year.
During this discussion Dan and Carrie spoke on two transformational trends impacting business banking in 2021: self-service and leveling up efficiencies. The rise of self-service is one of the leading trends reshaping the banking industry. Despite the initial fears bankers may have had about migrating their processes to a digital platform, many found that without such solutions, managing the demand during high volume periods such as the PPP, would have been not only inefficient, but impossible.
“As an ex-banker, I was the most skeptical about this type of thing. I valued my clients, and their relationships. What I learned was the relationship is still very valuable and you’re actually helping them by allowing them to do things on their own time. If they could be filling stuff out like uploading documents off-hours without you sitting right there, that is valuable to them,” said Carrie.
Numerated stands at the forefront of this revolutionary way to lend money to customers. In a survey taken from a $25-50B customer bank, Numerated revealed that 94 percent of their users found the application easy to navigate, and 87 percent felt confident applying for their loan on the website.
Further, in Q1 alone 84 percent of loan applications were completely self-serviced by borrowers, and within the PPP, 94 percent of forgiveness applications were done by borrowers. This speaks to the accelerated shift in digital behavior that the pandemic has only exacerbated.
Dan and Carrie expanded on these touch points during the conference, speaking specifically to data and efficiency.
Four Ways You Can Pull Efficiency Out of a System
Dan speaks on how we see our customers wanting to use digitization and data to save time: “We’re not here to sell software but to show what data can do if you utilize it during the lending process.” This efficiency aspect can be narrowed down to four essential buckets:
- Pre-Filling applications
- Utilizing a central place to communicate with your borrowers
- Credit Automation
- Fully automated document prep
Through data utilization the borrowing process is streamlined and easier for the consumer overall. This not only maximizes input for the bank, but generates a more user-friendly experience on the consumer end.
“Using a digital borrower portal allows the borrower to get all of the information they need,” Carrie said. “When starting an app whether you are the banker or customer a lot of the needed information is already uploaded to the platform, so there’s nothing to fill in.”
When it comes to automation, the way institutions approach this varies. For Dan, the crucial element at play to spearhead automation is data. He says, “I would be shocked if any of the institutions on this call were taking a consumer application completely blank, you are almost certainly in your consumer lending businesses starting off with some level of data that you’ve got on your customers,” he said. “This just has not to date been applied to business lending.”
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