The speed of digital transformation has rapidly changed consumers’ behaviors and demands – and this evolution extends far beyond food delivery apps and entertainment streaming platforms. As technology advances, today’s consumers want and expect instant and on-demand financial services options and offerings. To remain competitive in this changing market, credit unions must leverage the power of instant to provide the immediacy and seamlessness that members expect – and this especially rings true with digital lending experiences.
The new norm of immediacy
In 2023, consumers no longer want to wait five to seven days for credit card application approval. PSCU’s latest Eye on Payments study found that 75% of all respondents who applied for a new credit card within the last 12 months received approval or denial in real-time. Instant approval/denial contributed to higher satisfaction with the process, compared to respondents required to wait. Instant decisioning on lending applications is not just a desire but an expectation.
Consumers also expect frictionless experiences across the channels of their choice when interacting with their financial institution during the card application and approval process. According to Eye on Payments, 53% of members report interacting with their credit union by visiting a branch, 49% by calling on the phone and 37% by using their credit union’s mobile app. Additionally, the 2021 Consumer Credit Market Report found that 88% of card applications were submitted digitally in 2020, with over half of credit card applications coming from mobile devices. As credit unions continue to adapt their digital offerings, branch experiences and contact center processes to serve members’ changing needs, integrated solutions are essential to meeting expectations for omnichannel convenience and real-time credit approval.
In addition to supporting retention and strengthening relationships with current members, superior digital card application and account opening solutions can help drive new member acquisition. The account opening process is a critical entry point for a new cardholder, setting the stage for future member experiences. Real-time approval/denial of digital credit card applications is essential for keeping up with competitors’ offerings while winning and retaining share of mind and wallet.
Unlocking the power of instant
Given consumer demand for immediacy, expediting loan origination is vital to maintaining and growing market share. To provide the fast, seamless experiences that members demand throughout the digital credit card application and approval process, credit unions can tap into the innovative technologies of fintech partners. These digital lending solutions are most beneficial when optimized for credit unions’ unique needs, as well as their digital credit card opening and loan origination processes.
The right digital lending solution allows a credit union to enhance the process for current members through convenient credit card application technology that pre-fills applications using information from their profiles. For non-members applying, the technology streamlines the process by pre-populating the application with relevant information from their mobile devices. Additionally, a fully integrated digital lending solution allows members who start applying on their credit union’s mobile app to visit their local branch for in-person consultation, while those who begin the application process at a physical branch can continue the process online.
After a member applies, supplemental authentication technology can efficiently help verify identity using the applicant’s facial ID and driver’s license or passport. This technology empowers lenders with the ability to make safer underwriting decisions and ultimately enables faster approvals from credit unions.
Upon application approval, a digital credit card number is automatically generated so that a member can immediately use the newly-issued card for online purchases or provision it to a mobile wallet while the physical card is shipped. Eye on Payments found that only one in four respondents were issued a digital card while waiting for a physical card to arrive. However, 92% of credit union members who were issued a digital card said they used it. This discrepancy can make or break top-of-wallet status for credit unions’ cards.
Digital card application and account opening solutions are a necessity as seamless, real-time approvals become the new standard. Credit unions can deliver exceptional member experiences and achieve a competitive advantage in the dynamic financial services landscape by utilizing innovative digital lending solutions that harness the power of instant approvals to meet consumers’ evolving expectations.