Why consumers walk away from loan apps that aren’t intuitive

When it comes to loan apps and the digital age, outdated techniques won’t work. Millennial consumers “live” on their mobile devices while Generation Z was raised on digital from birth. Hence, younger consumers rely heavily on smartphones for shopping, banking, social media, work, entertainment, and reviews/feedback. It’s no surprise that lenders, who strategically build their mobile apps with smartphone users in mind, are attracting more mobile-centric shoppers. Potential applicants might want to pay off student loans early or purchase their first car or home.

But, what if you’re a lender and your site lags? What if you’re optimizing ads to no avail? What if you have high bounce rates and churn – despite your best efforts? And importantly, why are some apps ignored, like yesterday’s Twitter feed, and others are coveted and prized, like Instagram?

Potential loan applicants don’t complete digital loan transactions due to slow page load speeds. It might also be apps or sites that aren’t intuitive for multichannel borrowers or they’re not optimized for mobile. Let’s take a look at what your loan apps should include and ways to enhance your online lending presence.

Auto Loans: Consumers Expect Mobile-Centric Experiences

J.D. Power found that with auto lenders, well-designed apps can improve customer satisfaction and about 47% of car buyers shop online first before going to a dealership. Leveraging your digital online presence can improve your lending strategy whether it’s for auto lending or other lending products. Further, expediting loans, better user experiences and reducing negative sentiment can lead to higher ROI and lower costs. Win-win. So, what does this entail? Glad you asked.

Improve experiences and lower costs

Let potential applicants answer a few targeted questions to start the loan origination process. While auto-fill features and auto saving data reduce human errors, collecting relevant data is for future document usage. You won’t incur costs from human labor that has to review applications manually.

Your loan origination software might include:

  • Easy-to-understand online applications, customizable forms, and automated decision emails.
  • Pre-approval letters, credit pulls, and disclosures.
  • Loan status updates, closing contracts (with reduced closing times), terminology, and support (chatbots, live) for optimal experiences.

Capture relevant data, build trust, and improve workflow strategies

An enhanced loan origination platform can capture application data and store documents for compliance and regulation purposes. With digital records and collected data, there are no physical copies or forms to fill out or store. It should be almost as easy as taking out a loan from a friend!

Digitization in the loan process also reduces human errors. All fields in the loan origination system are entered correctly, applications can be reviewed in real-time, and consumers can lock-in interest rates.

Because applicants expect a seamless and secure interface, every touch point can build trust, loyalty, and confidence (which leads to referrals). To further enhance their experiences, include newsletters, ecards, and other ways to stay top-of-mind with new borrowers.

For businesses with optimized mobile lending apps, there are cost-saving benefits.

Gartner estimates that within 2 years, about 66% of businesses will offer virtual online support. This represents a 50% uptick from 3 years ago. Optimized mobile loan apps that include artificial intelligence (AI), machine learning, and chatbots can reduce labor costs. They can offer digital assistance and voice banking and automate routine tasks. They can even create milestones, improve workflows, and store insightful data to cross-promote other lending products.

Reduce churn and bounce rates

Optimizing your loan app can reduce your bounce rates. Consumers want to give you their business. But, they need to know your app saves time and has enhanced features.

To demonstrate how much influence consumers have, here are a few interesting stats:

  • About 75% of consumers expect reliable service and assistance (online, brick-and-mortar).
  • A record 77% will recommend a business to friends if their experience is positive, but 67% cite bad experiences as their reason for churn (negative feedback). Additionally, nearly 60% change brands if they had a bad experience.
  • Nearly 80% of shoppers use their smartphone in a business to compare competitor prices and reviews.
  • Close to 33% of customers ended relationships with brands that didn’t offer personalized online experiences (chatbots, virtual assistants).

Credit Union Loans: Consumers Want Convenient Online Lending

PWC found that about 80% of consumers attribute convenience, speed, and friendly support to positive customer experiences. Hence, your lending techniques are important.

Millennials and Gen-Z like the anytime/anywhere approach when banking and completing transactions online. Hence, loan apps should be easy to complete online 24/7/365. Your software provider can tailor your app based on your audience.

A few tips include:

  • Have software designers configure the appropriate drop-down menus. Set validation rules that guide applicants through the lending steps.
  • Test your app on simulated devices and configure it in real-time. As market conditions, interest rates, and lending strategies change; you can update it accordingly.
  • To avoid mobile app mistakes, use large call-to-action (CTA) buttons, action images, and colors reflecting your brand. For accessible design, avoid violating Americans with Disabilities Act (ADA) laws.

Note: Keep your app or site relevant with helpful features only a few clicks away and test your page load speeds as borrowers might be on smartphones (with only their thumb or index finger).

Optimizing your app reduces the need for paper documents and it can reduce human errors. You can provide research, real-time rates, lending terminology, and chatbots. This provides better experiences regardless of the borrower’s channel (online, in-person).

Ultimately, a responsive loan app can influence applicants, offer better experiences, and simplified loan applications can lead to increased referrals and ROI, and lower churn. Remember, consumers return to apps with ongoing value. Target features your applicants and borrowers want. Meeting their needs and nurturing them early can help when you’re ready to cross-promote (lifestyle loans, alternative lending) later, and with successful loan app strategies – you will meet again. A wise and noble influencer once said, “Use your feelings Obi-Wan and find him you will”.

Steve Maloney

Steve Maloney

Steve Maloney is president/CEO of Sync1 Systems, has more than 20 years of experience in the Information Technology field in addressing issues specific to the financial services industry.  Prior ... Web: https://www.sync1systems.com/solutions Details