Building a better lending experience through integrations

How lenders can gain efficiencies and exceed borrower expectations by reducing friction

Financial institutions are living in the age of the consumer experience. Failure to deliver high customer satisfaction will put any lender at a competitive disadvantage, making the importance of providing an experience worthy of a high Net Promoter Score (NPS) a critical component of any lender’s operations.

To succeed, financial institutions must understand consumer expectations and then find a way to deliver them consistently. Traditionally, businesses have referred to Customer Experience (CX) as the sales and marketing touchpoints along the customer journey, but that is changing, according to Accenture:

“How we interact with brands has evolved, and so too has customer experience. Even before Covid-19, digital was already impacting how we all live, shop, work, and play—and the pandemic has upended things even more. Many of the consumer behavioral changes we are seeing today are likely to stay with us for a long time, possibly forever. Some have been in motion for years. Many have now been accelerated.”

Digital is the key word here because it speaks to the new way Americans have learned to conduct business. To consumers, digital means fast, customized service by companies who know exactly what products and services they want—often before they ask for them—and then deliver them.

CX has moved beyond marketing to fulfillment, especially for financial services providers. Today, Amazon defines the customer experience in terms of the online journey in finding, ordering, and paying for a product. Credit unions and other lenders must also consider the process of originating a new loan product or delivering a financial service. Consumers will consider this part of their overall experience, rightfully so, and will judge institutions on everything that happens to them during the transaction.

Accenture says we are on the brink of a CX renaissance, forcing companies to reimagine their businesses. We certainly see this among the credit unions that we serve. This is driven by the experiences consumers enjoy online today and is leading them to expect the same friction-free experience from financial services providers.

Fortunately, it’s possible to meet the demands of today’s consumers by using the right technology— and the right connections.

The power of the modern API

Nothing degrades the borrower or member experience more than friction in a system where the consumer didn’t expect to find it. Because there are very few products and services that financial institutions deliver without some interaction with third parties, the key to delivering great CX lies in perfecting the connections between these parties. This is where technology firms call upon the power of the API.

Application Programming Interfaces (APIs), are mechanisms that enable two software components to communicate with each other using a set of definitions and protocols. Virtually all modern software is built on open architectures that allow APIs to connect systems and share information seamlessly, often without the consumer having to take any action.

API usage has been growing quickly across all industries. When RapidAPI asked developers in early 2020 whether they would use more or fewer APIs in their work in the year ahead, 61.3% said they would use more. These tools have been used effectively in the financial services industry for many years now.

We see the power of APIs quite often with data verification. For example, a new depositor may provide an identification document that can be quickly scanned and compared to a national database to confirm its authenticity. Or, a borrower can provide information about their credit, which can be confirmed with an electronic request to a credit reporting agency.

But requesting data and receiving a response is just the beginning of what is possible with these powerful tools.

Integrations that improve the customer experience

The key to removing friction in any interaction, including consumer and auto lending, is to employ the best automation to the most extensive set of processes required to fulfill the transaction. Many lenders have invested in robust core systems that offer a great deal of workflow flexibility and automation to achieve that goal.

But to deliver an experience that will impact the lender’s NPS, the automation must extend beyond its systems to those employed by the third-party partners they rely upon to fulfill the transaction. That means automating the workflows that control the data moving between the systems.

Modern APIs make this possible. The state of the art for industry APIs is complex integrations that not only send data back and forth between systems, but also include workflow instructions so systems on each end know what to do with the data they share.

One example is how our software works with auto dealerships using a well-written API integration to ensure financing documents are combined in the correct order on the dealers’ side. This ensures that data pulled into the lender’s origination system can be used to render a decision quickly.

The real opportunity in API integrations

What’s most exciting about these API-driven solutions is that they can be configured relatively quickly to meet the exact needs of a lender. Financial institutions can now decide exactly what they want and how they want to achieve it and then developers can very quickly make the connections that will provide that experience.

This was not possible in the past because most institutions did not have the bandwidth to create new processes and if they did, they did not have the IT resources to develop them. Today, a financial institution’s technology partners can do the heavy lifting, using existing APIs to let the lender work with any partner they choose in virtually any manner the parties agree upon.

It doesn’t make sense for the credit union’s team to focus on this kind of work when their time is better spent attracting new borrowers and offering them personal service that turns them into lifelong customers.

Rather, lenders should spend time seeking out technology partners who understand the power available to them and have the drive and dedication to put that power to work for the organization’s benefit.

When they find the right partner, the sky is the limit. Then, all management must do is imagine a better solution, a better experience for those they serve, and then count on their partner to help them realize it. Those that do will see their NPS rise and their position in the competitive landscape improve.

Bill Lynch

Bill Lynch

Bill Lynch is the Sr. Director of Strategic Alliances at Origence. Bill has been with Origence for three years, and is responsible for managing refinance and integration partnerships, as well ... Web: Details