How to Digitize the Lending Process to Create Better Customer Experiences

Consumers are becoming more demanding and impatient about their financial experiences and how they want to access their private data. They want to access their finances online and via their mobile phones. They want to be able to pay bills electronically, rather than use checks and stamps. And they want loan decisions to be made in minutes, not months. This is creating a challenge for everyday lenders who are trying to keep up with consumers' expectations to deliver a modern experience, as well as fulfill loans quickly, keep them profitable, and reduce fraud and risk.

Having a digital loan experience is now just the price of admission to being in the lending marketplace. Lenders need to address all the underlying services that create a comprehensive digital experience — fast verification of financial information, the ability to retrieve information from outside sources, the ability to quickly and easily identify qualified borrowers, and increase security and fraud prevention.


To help the lending industry better understand how creating a digital experience can not only improve the customer experience, it can help to increase the speed and number of loans, we held a webinar on the subject — How to Digitize the Lending Process to Create Better Customer Experiences. The speakers included Alyson Clarke, Principal Analyst, Forrester Research; Natalie Hunt, Director of Digital Alliances & Technology Integration, Fannie Mae; Jonathan Principi, Senior Director, Business Development, Envestnet® | Yodlee®; and the event was moderated by Mike Sisk, Contributing Editor for American Banker.


Alyson Clarke kicked off the webinar by declaring 2018 to be the year of the digital mortgage. She said after talking to a lot of their clients, they're starting to see a lot of digital mortgage programs come out of the pilot phase and launch to general consumers. She predicts this is the year we finally have a considerable number of players that can do digital mortgages, as the result of investments of time and technology by many firms. The trend started, says Alyson, in November 2015 as Quicken Loans launched Rocket Mortgage. They promised fast approval — "'in the time it takes to order your coffee,' although it's closer to 8 minutes (which is a bit long to wait for your coffee)" — and removed a lot of the paperwork surrounding loan applications. Then we began to see a lot of disruptive lenders challenge traditional lenders, not just in student lending anymore, but in mortgages as their customer base began getting older and moving on in life and having families and buying homes.


The next step in the process has gotten us to the point where we're starting to see digital closings, and figuring out a way to sign the four-inch stack of forms at every mortgage closing. Rather than signing and filing dozens of paper forms, it's now possible to use digital signatures on digital forms, and send the completed forms to the borrower. Now, we're starting to see traditional lenders follow suit as they give up their outdated legacy systems. However, there are still plenty of lenders still launching mortgages on 20-year-old DOS screens, and Alyson is looking forward to more lenders developing digital tools and services to connect to customers very early in the home buying process.


Alyson concluded by saying the future is going to be AI driven. Artificial intelligence is helping lenders come to a more conclusive decision based on data, and it helps them deliver more personalized loan offers and terms. Afterward, Mike led a discussion with Alyson, Natalie Hunt, and Jonathan Principi, who shared their answers to questions like, "How do you define a digital mortgage experience?" and "Lenders are focused on the front-end experience, but do they understand how data and third-party source data enriches and integrates with these enterprise systems?"


All in all, it was a very informative and thorough webinar, and a must-see for any financial institutions that provide loans to consumers. Lenders who are still dipping their toes into the digital lending process should listen closely to this webinar, and hear how thought leaders and experts like Fannie Mae, Forrester Research, and Envestnet | Yodlee are helping financial institutions embrace digital lending (and closing). You can register to hear an on-demand recording of the webinar. And to learn how to use some of Envestnet | Yodlee's solutions — account verification, data aggregation, artificial intelligence, and machine learning — in your digital lending programs, please visit our website or speak to one of our digital lending experts.