Providing convenient experiences has become more important than ever for financial institutions that want to remain competitive in 2022 and beyond.
Business borrowers were introduced to convenient online banking during the pandemic, and now, they’ve come to expect it.
In fact, some lenders have seen business borrowers pay up to 47 percent APR for a convenient business loan that is entirely self service. In this video, Dave Weber SVP of Commercial Banking at Dollar Bank shares his findings on “the convenience factor” in commercial lending.
We surveyed our financial institution partners, and found that 65 percent of them require a business customer to open a deposit account in order to receive a loan through their institution and 77 percent reported that it’s highly important that they capture the entire business relationship with new business customers including loans and deposits.
Many financial institutions have taken a major step towards a convenient experience by digitizing their loan origination processes, but for some there is still a major bottleneck in the flow between loan approval and the opening of a new deposit account.
The Convenience Gap in Business Loan Applications
Although the majority of lenders indicate that capturing the entire business relationship is a high priority, the experience for opening a deposit account tends to fall short of the convenience that customers expect.
When applying for a loan using a digital LOS like Numerated, borrowers are delighted with a fast and efficient online application. Borrowers are often notified within minutes of starting an application that they have been approved for a loan, due to automated decisioning strategies put in place by the lender.
The convenience gap in the loan origination process typically starts here. When a borrower is approved for a loan, in many cases, they need to open a deposit account; however, many lenders have yet to adopt an online solution for opening business deposit accounts.
Due to this lack of technology, borrowers are directed to set up a time to visit a branch to open a deposit account. They are greeted with an extremely time consuming and clunky experience that does not match what business borrowers expect when opening a deposit account.
Internal bank efficiencies also decrease as branch employees are often left with the task of repeatedly contacting borrowers to ensure they set up an account to receive loan funding, creating even more required customer touch points within the process.
Lenders have experienced a drop off in engagement in the customer journey between the loan approval and account opening stages of origination. Many business borrowers simply don’t have the time to visit a branch and open an account and would prefer to have an entirely online experience end to end.
With online-only competitors providing simple and fast application processes, it’s likely that business customers will switch to alternative options, due to the convenience that they provide. Because of this, it’s highly important that lenders place seeking solutions to fill this urgent need within the loan origination process into their bank’s strategy.
The good news for lenders is that they can easily adopt new technology that enables borrowers to apply for a loan and open a deposit account in one convenient application.
Winning the Entire Business Relationship with Convenient Account Opening
Financial institutions no longer have to lose out on capturing the entire business relationship due to legacy account opening processes. With Numerated’s digital account opening solution, borrowers can apply for a loan and open a deposit account in as little as 10 minutes.
Learn more about how you can expand your business portfolio using Numerated by contacting us today.