Creating a more personal loan experience through artificial intelligence
Personalizing the consumer experience in a way that doesn’t necessarily involve a person? Say hello to the future of lending technology that brings loans – and members – into the credit union in ways that help cement the relationship.
At the center is AI, behavioral science and creative lending techniques all designed to improve the experience at every step – from engaging the customer through more conversational language, to providing a view of the situation that extends beyond the transactional, and automating backend workflows that make in-branch underwriting and closing seamless and frictionless.
This move toward digital lending couldn’t come at a better time. A recent Market Analysis Report on Digital Lending by Grand View Research expects the global digital lending platform to register a compound annual growth rate of 25.9% from 2022 to 2030 – from its current value of USD 5.84 billion in 2021. That’s a lot of opportunity to be had.
As financial institutions look for ways to stand out in a crowded marketplace and consumers look to financial institutions for tools and services that put them in control of their finances – all without giving up freedom, personalization or control. The emergence of solutions that combine AI, data and technology are making a difference.
It’s not what you know – it’s what you’re able to do with it.
Studies from 2022 show 9 out of 10 Americans use at least one fintech app for their banking needs. That number probably isn’t too surprising. Of these however, 48% said the app made them feel in control of their finances. And that’s the feeling that digital lending apps, such as the one from VisiFI, are continuing to build upon.
For example, credit union members not only want their financial institution to provide financial services, studies show they want the financial institution to assist them with the decision. That means showing the member that you understand what they need and having the tools to take the information they provide, analyze the opportunity using algorithms and actual data – then communicating the options available to them in a conversational language that’s simple and easy to follow.
Phrases like, “let’s find the right loan for you,” “good choice,” and “you did good today” all become part of a meaningful “dialogue” you’re able to have with members. Even the use of graphics, like populating the background with a medical bill and a picture of a nurse with heart hands for members health-related loans, or books and a diploma for a college book loan take away the anonymity of the typical loan process. Providers like VisiFI have integrated their solution with JD Power to perform evaluations and display the actual features of the vehicle.
Speed and convenience remain high expectations.
As with any digital solution, expectations for ease, speed and convenience are high. Integrations and automation deliver on those expectations. IT analyzer integration allows members to populate applications by scanning their licenses. And these solutions carry innovation through to the backend with automations and workflows that allows applications to be completed and submitted in minutes. The digital lending solution then performs as an extension of the branch to meet members where they are with creative options to fulfill their needs.
For example, by analyzing data and information a credit union already has from its members, VisiFI leveraged its expertise in behavioral science, core system data and AI – along with its own creative approach to lending techniques – to design a member-centric customized workflow for its digital lending solution. The process is based specifically on members’ behaviors, qualifications and specific opportunities. So to the member, it is as highly personalized as talking to someone in-branch – and so are the options it presents.
That can mean a traditional loan with details about rates, terms and payments. However the solution may just as likely provide an option that considers savings account balances or a CD to recommend “borrowing from themselves” and the resulting savings over time. So, while they’re reviewing what’s possible, they’re also learning that their credit union can always help with their financial needs in expected and unexpected ways. And that’s a powerful take-away for long-term relationship building and success.
What does the future look like?
With digital lending technology and innovation, talking about the “future” isn’t years and decades away. It’s happening right now. In an environment where the rate of digital lending continues to grow even as some credit unions do not have the staff or expertise to keep pace, digital lending solutions are a welcome advancement.
Add benefits like a reduction in human error, faster decision-making, compliance and regulatory issues, and an even greater array of options to offer members and it’s a matter of when credit unions can start implementing these digital lending solutions.
According to VisiFI, whose solution is already in market, they’re seeing the positive response they hoped to generate. According to one credit union CEO, “The app is so cool. It’s like I am talking to a loan officer, and they thought of everything.”
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