Going digital — meeting high consumer expectations with auto-decisioning

Zest AI team
January 17, 2024

How advanced digital experiences changed consumer beliefs around your online banking processes

Plenty has been written about smaller lenders' competition from challenger banks, neobanks, and fintechs. Heck, we’ve written about it pretty consistently for the last couple of years, too. However, regarding creating a compelling digital experience — like an online banking workflow — your institution competes with every other company with a mobile app or website. So, pretty much everyone.

Today’s consumers, quite understandably, judge every digital experience they have against their best digital experience. It doesn't matter who the company is or what experience they provide. If you have a digital presence, it's fair game against anyone else with a digital footprint. In other words, you’re not just competing against Chime and Venmo when it comes to having a great digital experience. You’re up against Starbucks, Amazon, and Instagram, too.

The cost analysis of upgrading your digital imprint

Small lender leaders know that digital channels are crucial for growth and improving customer loyalty, but they often struggle to succeed in the digital lending game

Web design is expensive and tricky — especially since online banking functions often interact with lots of personal data, user error, and a heightened need for security. Not to mention, the process needs to be smooth, easy to understand, and give users a sense of forward progress, lest they get frustrated and seek out a different lender with a simpler process. And while it seems silly, the visual aesthetic of your online platform matters too. It takes less than 50 milliseconds for a consumer to decide if they like a website, and research shows that 75 percent of a company’s credibility in the eyes of a consumer is based on website design.

That old saying, “If it ain’t broke, don’t fix it,” doesn’t necessarily apply to a lender’s website — just because it is up and running doesn’t mean it can’t see some improvements. When 94 percent of users leave a website simply because of low-quality design, updating your online presence is worth the extra effort and cost.

The other side of the coin

Let’s return for a moment to the Amazons, Instagrams, and Starbucks of the world. What can we learn from these companies when it comes to consumer behaviors and expectations? 

If we were to boil it down to one word — personalized.

These corporations rang in an era of one-click shopping, algorithms for your social feed, and ordering the exact drink you want to be ready and picked up on your way to work.  Their apps are simple and predictive, and despite any personal beliefs about the companies, they set the standard for every other company worldwide.

So, how do lenders follow in their footsteps? We can look at the examples that online banking companies like Chime and Venmo established. A lot of that happens when you invest in your digital footprint. A snazzier website, with higher-quality photos and simpler workflows for your products and services, is an excellent place to start.

What will help your institution stand out?

But the real implication of whether your organization can compete in today’s digital world is in delivery. When folks can order their groceries online and pick them up in a couple of hours, they can start to gain pretty high expectations about the speed at which they receive a loan decision. At times, it's hard to remember that to the everyday consumer, a loan is the equivalent of someone looking at a couple of pieces of paper, doing a little math, and giving a thumbs up or thumbs down.

Those with any behind-the-curtain knowledge would know that it's simply a lot more than some paper and a little math. But the dilemma still persists — how do you speedily, but safely, decision on extensions of credit?

If we were to boil it down to one hyphenated word — auto-decisioning.

That’s where technology like AI-credit decisioning can come in and help out. We’ve found with our technology that up to 80 percent of applications can be auto-decisioned, meaning an instant approval or denial of an application, in seconds. That other 20 percent often needs a closer look and will flow into a manual review. This kind of efficiency — especially if you pair it with a great-looking, simple website design — will help your organization not only compete with other lenders, but with the top digital experiences across all markets.

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