Meeting consumer expectations for immediacy through digital lending

Today’s consumers expect immediacy and a frictionless experience, especially around less complex and higher frequency processes like acquiring a new credit card. While many credit unions have modernized their in-branch and contact center processes to meet this demand for immediacy, other experiences still lag behind. This includes digital account opening and credit card loan origination, both of which are currently associated with a number of challenges that often result in consumer dissatisfaction and frustration.

Let’s take a deeper dive into the market landscape, expectations and opportunities around consumer loans, and how credit unions can win member share and stay competitive in a modern, digital-first world.

Market landscape

According to benchmark research performed by Curinos in 2023, nearly three out of four new accounts are opened in a physical branch. Yet, Curinos’ data also shows that consumers report an overwhelming preference for digital, with 70% saying their account opening preference is digital. In addition, when asked about driving factors when it comes to selecting a financial institution, 40% of consumers say they prefer the convenience of digital banking versus just 17% who report preferring the proximity of a branch.

Looking at consumer expectations, many are prepared for more friction, time and steps with more complex, less frequent loan types like mortgages, home equity lines and auto loans. For less complex, more frequent loan types like credit cards, the expectations are generally a short lead time and less paperwork. However, that often does not turn out to be the case.

Providing the same application experience for all loan products creates unnecessary friction. The good news is that credit unions now have an opportunity to reduce friction by creating more efficient application processes for higher frequency products, ultimately leading to a better application experience.

Challenges and opportunities

Failing to leverage digital card delivery can result in credit unions missing out on significant potential incremental revenue. But, to some, digital account opening and credit card origination are associated with several obstacles, including a lack of automation, fraud, integration impediments and outdated technology. Consider partnering with a fintech solutions provider, that offers digital origination solutions that solve for these barriers. Finding and implementing an automated digital origination process, which features secure transactions and seamless integration with multiple systems to power instant decisioning, will create a better member experience—more along the lines of what consumers are expecting in today’s increasingly instantaneous world.

Facilitating an end-to-end seamless experience can represent numerous opportunities for credit unions, including:

• Increased membership growth with a seamlessly integrated new account opening process
• Reduced operational costs with automated underwriting capabilities
• Instantly provisioned digital card credentials to a mobile wallet for immediate use

Instant digital card issuance is not only an experience win, it can also be a very effective sales tactic, with credit unions providing members the ability to use their new card credentials online or in-store immediately—an option that is not consistently offered by large issuers, giving credit unions a distinct competitive edge to gain market share. With real-time lending approvals and immediate access to card credentials via digital banking and mobile wallets, credit unions can meet cardholders’ expectations, increase revenue and drive growth.