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Why Digital Banking Is Not Only Surviving But Thriving in 2020

Efforts to stem the spread of Covid-19 have forced consumers and businesses into workarounds for meeting basic needs — usually with significant help from pre-existing technologies. Banking is one example — and it’s likely, say experts, to remain substantially tech-enabled from now on as companies and their customers grow accustomed to the ease and convenience of digitized financial service.

Of course, banking isn’t the only case in point. People held online business meetings before the pandemic, but they’ve been doing it much more since — with online-video technology becoming a part of our personal lives for staying connected with family and friends. Online grocery shopping has been around since the mid 1990s, but it has taken on new importance in recent months, as topics like supply chains and logistics have become the stuff of daily news coverage.

But the shift from traditional toward online banking has been particularly dramatic. In an early reaction to coronavirus lockdowns, US mobile banking traffic increased by 85% in April 2020, according to financial-software maker FIS. Meanwhile new registrations for mobile access to existing accounts grew 200% in the first few weeks of that month.

Meaningful AI-Powered Automation to Put Lending on Auto Pilot

The new socially distant reality leaves banks and other FIs no choice but to speed up the digitalization. Yet with the high-precision and high-risk products in the lending niche, one can’t hurry to roll out an unproven digital lending solution. Ready-made FinTechs like TurnKey Lender take that off your plate by delivering an end-to-end lending automation software with credit decisioning and loan origination powered by AI which grants an unmatched scoring accuracy, speed, and flexibility for personalized configuration based on the specific business logic and requirements.

Developing, testing, and launching a brand-new solution can take years and the ongoing maintenance and upgrades will consume all the profits you’re going to make issuing loans online. So the only viable choice in today’s environment is to unify all the crediting automation needs under the umbrella of an advanced automation solution.

TurnKey Lender offers a modular end-to-end solution pre-configured for the following parts of the loan’s lifecycle:

  • Loan origination
  • Credit decisioning
  • Underwriting
  • Collateral management
  • Servicing
  • Collection
  • Reporting
  • Compliance
  • And more

The solution is regularly independently tested and easily handles high volumes of loan applications, with the most recent audit showing that it processes 450+ loan applications a second without skipping a bit. The entire credit decisioning and origination process that used to take banks days if not weeks is now reduced to as little as 30-seconds thanks to self-learning deep neural networks and machine learning algorithms applied to risk assessment.

It’s also worth mentioning that no modern solution functions as a stand-alone island. The web today relies on meaningful integrations with third-party products and data sources like credit bureaus, bank statement providers, payment providers, SMS and email providers and so much more. TurnKey Lender comes pre-configured to integrate with 75+ leading integration choices according to lenders in 50+ countries and dozens of verticals. In addition, an intuitive API Client functionality lets you easily set up unique integrations with any product or service your business may need.

And lastly, to compete successfully in today’s digital banking world, you need to roll out changes before your competition does. And for that you need to have a reliable core lending system that supports deep business logic changes from the system dashboard. Given the complexity of the crediting industry and the uniqueness of each business, that’s not an easy thing to do, but with TurnKey Lender’s drag-and-drop business logic builder, you can fully reconfigure the crediting logic of your operation within hours on your own. And if need be, the expert tech support team is there 24/7 to help you navigate the rapid waters of the new era of fully digital lending.

The customer experience is king. To survive and to grow you need to provide your borrowers with the easiest and fastest process not less than fair terms and low interest. Clients are looking for lending that reflects the current state of the world’s digitalization. And it’s your business that can give it to them. That said, let’s get a deeper look into ways of making your digital lending operation compatible with the strange times we live in.

Note, TurnKey Lender partners with REPAY in order to enable fully automatic loans disbursement and collection. You can check how our partnership works in this step-by-step guide.

Digital Everything

“As with shopping and face-to-face communication, pre-pandemic technologies have put mobile banking in a position not just to weather the coronavirus, but to thrive in a post-Covid world as well,” says Dmitry Voronenko, CEO of lending-technology pioneer TurnKey Lender. “Consumer shifts of this size and type don’t reverse themselves.”

It’s clear that the pandemic, resurgent now in some regions, has been a catalyst for mobile banking. And for good reason. There’s nothing like shuttered branches and long lines at drive-throughs to inspire retail customers to try an at-home alternative like online banking — and to discover it’s perfectly suited to most of their needs.

In a similar vein, “mobile wallet” payments through smartphone apps — a way to pay without having to touch a terminal let alone a human — are up sharply in response to the pandemic, according to a newer report by FIS.

Online broker-dealers also saw an precedented surge in new retail-brokerage accounts in March, with — the story goes — young newbies piling in to buy beaten-down “bargains.” According to some experts, these new investors either think the economic fallout of the coronavirus will be short-lived, or they suppose specific companies and industries will prove robust enough to weather even a prolonged downturn.

While mobile banking, payments, and investing have increased in the pandemic, so has mobile lending. Established banks, lending-oriented FinTechs, and smart retailers looking to accommodate customers amid lockdowns and social distancing.

“Lenders who have adopted mobile origination in the pandemic see it as both a survival mechanism and a way, incrementally, to help bolster local, regional, and national economies in need of such infusions,” says Voronenko. “The coronavirus made banks and other lenders take action on the digital front, but the power of the technology is making them see the business-side possibilities — especially around enhancing the client experience — of operating healthier loan portfolios as the threat from the virus starts to slow.”

Staying Power

Broader consumer adoption of mobile financial services seems likely to benefit large banks most because they tended to have more robust online- and app-based capabilities in place to begin with. And although smaller banks can get up to digital speed quickly with help from nimble FinTechs, large and small institutions alike face the challenge of remaining central to the financial lives of their customers.

Consumer-preference tracker J.D. Power has for years emphasized a conundrum about online banking. Although banks’ happiest customers use a combination of digital and branch services, their least satisfied customers are those whose bank interactions are wholly online. In light of changes wrought by the coronavirus, banks are under pressure to “replace the in-person service they would have provided with personalized services delivered instead through digital channels,” J.D. Power says in its latest retail-banking report.

Although J.D. Power doesn’t suggest ways to improve the digital banking experience, Mapa Research does. Among its insights:

  1. Although many banks prefer some person-to-person interaction to complete applications, holistic digital onboarding with no interpersonal engagement is now a must-have. The borrower data, filled out online once, is automatically pulled on all the stages of the loan’s lifecycle, so new clients don't have to provide the same information over and over again, making branch visits unnecessary.
  2. Functionality is great, but ease of use is more important. Over the years, many banks have overloaded digital offerings with functionality — added, in every case, with good intentions. But all newcomers see is chaos. The fix? Launch a completely new interface or mobile app, and keep interactivity prompts clean and simple.
  3. Build seamless integrations between functional touch points. Despite the growing demand, to this day, few banks and credit unions allow borrowers free and unhindered movement between channels and mediums. Consumers want smooth lending process and integrated navigation, and few banks provide it. With a FinTech solution, this becomes a big window of opportunity.
  4. Replicate face-to-face sales opportunities that traditionally take place at the teller window. One option: highly personalized sales messages. This way, banks can take advantage of the fact that mobile customers typically make more virtual than physical visits.
  5. Use account aggregation, data analytics and more responsive recommendation engines to add value and deepen relationships between your institution and your customers.

Aspects of online banking were well established before the coronavirus pandemic,” says TurnKey Lender’s Voronenko. “It remains now to make refinements and clear out legacy clutter with a view to enhancing online banking and future-proofing banks.”

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