Modernise lending origination systems to reduce cost to serve and improve CX

15 Nov, 2022

Reduce cost to serve and improve CX – why everyone wins with an modernised lending origination system

While Australian banks are seen by consumers to generally have implemented adequate CX efforts, they aren’t perceived to have dramatically differentiated from one another in their respective customer journeys – according to a Forrester survey, the public perception of customer experience provided by financial services ranks very similarly across the board. Married with an industry-wide decrease in brand loyalty, lenders simply cannot rely on past success to retain their market share.

So what’s one of the most impactful ways to improve customer sentiment – while also reducing cost to serve and achieving greater regulatory compliance? Uplifting your lending origination system to have true digital mortgage capability.

While digital mortgages have been on the horizon for a number of years, it’s no surprise that the market demand for the service has skyrocketed through the pandemic. “Australia is far behind the rest of the world, where currently less than 3-5% of mortgages are originated digitally, compared to 30% in the US,” Nano Digital Home Loans CEO Andrew Walker told the Sydney Morning Herald. “We originally anticipated it to be a 3-5 year market shift, but now we believe that it will take place over the next 12-18 months.”

How digital mortgages can improve customer experience

The ability to give a prospective borrower an expedient and seamless loan application experience – with an equally swift response rate – contributes to an overall improved customer experience.

To maintain the good experience, the actual process of your digital application should be straightforward and functional, and prioritise excellent communication:

  • Allow omnichannel capability for a seamless experience across sales channels and devices – and don’t ask applicants and preexisting customers for data you already have.
  • Provide the option for human interaction where needed – and from an informed perspective, both about the loan process and products as well as the applicant’s experience.
  • Share regular status updates.
  • Inform unsuccessful applicants specifically why their loan was not approved – they will be more likely to return as a qualified lead at the right time than pushed towards your competitors.

It is imperative to give applicants the ability to complete the entire process online – no last minute summonings to a branch to sign a physical document (…that is only going to be scanned into a CMS anyway).

How digital mortgages can reduce cost to serve

Developing a decision engine that automates the credit decisioning process results in a faster and more consistent application, allowing your organisation to serve applicants at a greater pace and creating an economy of scale. Save hands-on human work for only the most complex and nuanced circumstances – not manually reentering data between platforms.

According to the Australian Financial Review, NAB’s current modernisation efforts – which are incrementally progressing to be fully automated by 2024 – have majorly contributed to an extra $13billion in mortgages in the first half. Already, the time to approve a loan has been dashed, with more than a third of applications receiving their answer in just an hour.

The automated approach also reduces the risk of human error when it comes to regulatory compliance.

Undertaking a digital transformation of your lending origination system is an opportunity with many benefits, and having the significant experience of 9Yards’ consultants can ensure it is able to be executed with certainty. Speak to our architects at 9Yards to see how we can help your organisation develop new efficient operations.