By the very definition of FinTech, online lenders have been using technology to transform financial services. In the early days, this equated to moving the mountains of paperwork into digital forms and automating manual processes.
Rather than optimizing transactions and speeding approvals, the same inefficient processes were often recreated. The same documents were required — now in a PDF format rather than paper. In fact, some lenders made the mistake of modernizing the front-end customer experience but didn’t link their digitization efforts to the back office.
User-Focused Design and Branding
What’s changed? Now, consumers are demanding more security, privacy and personalization from their banks and financial service providers. Online lenders and financial institutions must upgrade their user experience by speeding transactions, providing personalized pricing and integrating data sources to reduce documentation requirements.
A recent article in The Financial Brand magazine says consumer lending is entering a new era of digitization. The PwC Consumer Finance Practice team identified key trends that will drive the next era of innovation in digital lending:
- Evolving end-to-end workflows and processes
This long-running trend to simplify and streamline the often arduous loan approval process is now including new data sources. Financial institutions are re-thinking the requirements to originate a loan and reworking their customer experience and internal workflow to deliver a frictionless lending experience.
- Friendly Financial Advice Delivered Digitally
Borrowers value personal advice and often require 24/7 access to answers. Fortunately, digital tools are becoming more acceptable with the flexibility of self-service and collaborative models to deliver information quickly and efficiently.
The next generation of digital lending will engage consumers in new ways, such as digitally-augmented human support, voice interaction, AI-powered virtual assistants and chatbots, wearables, and augmented and virtual reality.
Since online-only lenders don’t have storefronts to develop in-person relationships, clear communications are critical for building trust. Opportunities to better serve online customers include:
- Discrete Research and Application Process
Plain Green Loans recently conducted another round of focus groups with customers and received feedback about the need for protecting their privacy. As a provider of short-term loans to consumers during emergencies, Plain Green’s customers require discretion as they research loan options online. Customers also expressed appreciation for a simplified and streamlined loan approval process. The consumers seeking emergency loans are on tight deadlines and need immediate responses to determine next actions. A fast review of applications and loan approvals are imperative to these consumers. In fact, a recent PwC survey of more than 1,600 adults with full-time employment found that 46 percent of those in the study – which typically has more stable finances than other groups – stated that financial challenges are the number one source of stress in their lives. The study concluded that lenders have tremendous opportunities to assist consumers in understanding their financial options and help them choose the best solution based on their personal situation.
- Building Consumer Confidence
Feedback from the Plain Green customer focus groups emphasized the need for authenticity, being real and believable.Creative Bloq’s list of big branding trends in 2018 cited the recent massive data breaches and natural disasters occurring one after the other as the reason consumers want extra assurance from brands that they will provide security. They say, “consumers are looking for clues to determine whether a brand can be trusted, from the overall design quality and experiential thoughtfulness, to ratings and feedback on social media. Brands have to view all of their activities through the lens of a skittish public and a tumultuous world; particularly online.”Online reviews were a major topic of discussion during the focus groups. Several customers said they don’t believe the reviews on websites because the testimonials are all positive or have high ratings. Instead, they preferred to research customer feedback on their own using Yelp, Google or other platforms to give them a broader understanding of experiences the general population may have encountered.
- Brand Images Reflecting Diversity
Focus group participants expressed a desire for more diversity in branding images. They want real people shown on websites and in communications that reflect wider demographic groups.Customers stated that they distrust images of people looking too happy, too sad or with fake, over the top emotions. Especially when making a financial decision, the customers want to see people with expressions that underscore the serious nature of the transaction.The focus groups provided meaningful insights that will inform our customer care team, website development, and acquisition and loyalty programs.
It’s clear that online lenders and other financial services providers must continuously seek customers’ feedback to align product development and business strategies to customers’ needs.
With more than 12 years of experience designing groundbreaking marketing strategies for Fortune 500 companies and financial technology brands, Guy Dilger, VP of Marketing, Plain Green, LLC, is known for generating engaging content and compelling concepts that resonate with targeted consumers. Prior to Plain Green, Dilger held senior positions within fintech and retail spaces where he managed national marketing campaigns and customer-centric loyalty initiatives for Sears and Kmart. Previously, he was part of the management team at Limited Brands, where his marketing work in support of Express brand included CRM, email, web-based programs and the redesign and relaunch of a private label credit card. Dilger has an MBA, as well as a bachelor of science in economics, from Southern Methodist University.