Face it: Your most profitable customers are empowered, impatient, and demand instant gratification (at least from their bank)Customers are feeling empowered in a way they haven’t before. They want great (sometimes even transcendent) experiences with every company they work with. If they don’t get it (or feel like they may not get it), they’ll abandon you and go elsewhere.
The best customers can also be the worst. They know they‘re valuable, and they have little to no tolerance for experiences that don’t meet their standards. Acquiring the best customers (and hanging on to them) is a huge challenge.
If your digital account opening process sucks (even a little bit), you lose.
Manual underwriting has become the slow, painful, labor-intensive exception to the newly mandated rule for instant, automated decisioning. To attract and engage today’s demanding consumers, banks are moving toward zero back office processing and manually underwriting fewer and fewer loans every year. And it’s no surprise—consumers want instant, personalized offers through their chosen channel. Your best customers simply will not wait for days, or even hours, to get a loan decision.
These customers also demand control over the application process, expecting to apply whenever they want to and through their preferred channel. If there are issues that need to be resolved, you better provide them with cutting-edge, self-service capabilities. For those customers who are willing to wait and suffer through a painful manual process, there may be a risky underlying reason (like not having other options). That could mean that you’re inadvertently adversely selecting for a higher-risk, lower-value portfolio.
Auto lenders who work through Dealertrack and RouteOne already know this hard truth. Your best customers are not going to wait around for a manually underwritten decision to come through sometime next week. The auto-decisioned deal that is immediate, attractive, and profitable is going to win—no fuss, no muss, sign here, thank you very much.
Sending applications to manual review is lose-lose.
Are you spending time and money just to aggravate your customers?
Any time you send a new product application to manual review, you’ve already lost.
At best, you will spend time and money approving the application and introducing delays that frustrate your new customer. At worst, you’ll spend that same time and money, but the applicant will either be declined or will abandon the process before you can get back to them.
The result? You’re wasting resources to aggravate your customers. There is no margin for that “race to the bottom” business model with today’s demanding customers and relentless competitors. That’s lose-lose for all.
Industry-leading banks ensure that their back-office staff are laser focused on improving the automated process and dealing with high-priority exceptions where human interactions are truly required to provide exceptional service.
Frictionless, instant decisioning with self-service is win-win.
What if you could empower customers to resolve any problems or questions with their applications through self-service, with no intervention from underwriters?
A large percentage of applications sent to manual review end up there because of relatively simple problems, like a discrepancy between the address listed on the application and the address on file at the credit bureau.
When you help customers directly resolve application problems (instead of sending those applications directly to an underwriter’s review queue), you give them empowering, meaningful choices. They can self-serve to address issues, or they work with a banking professional if they need or prefer that level of service. This greatly improves customer satisfaction, reduces time and money spent on manual review, and frees up your staff to focus on those customer interactions where they can truly make a difference for a customer.
To actively engage your customers in the origination process, banks need intelligent, interactive, automated omnichannel communication that keeps customers informed of the status of their applications and empowers them to fix problems through a self-service portal. For example, if income verification is needed, customers can receive a helpful prompt through their preferred channel and can quickly upload a W-2 or their paystubs. They get helpful, timely feedback on their application, and you get an efficient, automated workflow that doesn’t fill up an underwriter’s queue for days.
What if you could increase your auto decision rates with no impact on risk or compliance, effectively shrinking the ‘gray area’ where human underwriters are required?
By automating standard processes and enabling self-service underwriting, you can deliver the most satisfying possible account-opening experience to more of your customers and enable your organization to scale up and grow faster.
How can you safely and efficiently increase auto decision rates? With actionable analytics that provide a suite of predictive and prescriptive analytic capabilities. You can leverage all of the available data to more confidently drive automated risk and pricing decisions.
That’s win-win for all. Your customers get frictionless (maybe even enjoyable) experiences and instant decisions that are supported by self-service through their preferred channel. You get cost-effective, risk-aware auto-decisioning that safely drives acceptance rates for the best (albeit demanding) customers to build your ideal portfolio.
Why settle for lose-lose aggravating origination experiences that are slower, more expensive, inconsistent, overly opaque and complex, and may be adversely selecting for more risk and less value?
Tom Johnson is Senior Partner of Cross Product Solutions at FICO.