Money Mobility Tracker – April 2023
April 11, 2023
As inflation rises and recession looms, consumers are anxious about their finances. With 48% of consumers less likely to take out a loan since interest rates have increased, banks must provide an enhanced lending experience to stay competitive. Borrowers want a faster and more convenient lending process, with 35% of consumers believing they should be able to complete a loan application in less than two hours.
Additionally, small to midsized businesses (SMBs) are looking for a fast lending experience with immediate funds availability from lenders and are willing to switch to FinTechs if legacy banks fail to deliver. However, increasing fraud complicates the digital lending experience, with phishing being the most common scam. Lenders can reduce fraud while making more accurate credit decisions and delivering them faster through technology adoption and data automation.
The “Money Mobility Tracker®” explores how borrowers are demanding a faster lending experience amid challenging economic conditions and how lenders can deliver by leveraging technology to reduce fraud and make accurate credit decisions.
Around the Money Mobility Space
Credit unions can improve consumer satisfaction by modernizing their lending process through a more user-friendly, faster and safer loan origination system. Recent research found that banks and FinTechs saw increased customer satisfaction due to superior digital and mobile banking features, while CUs fell slightly. With lending being one of CUs’ strong suits, automated decisioning could boost satisfaction by accelerating underwriting and making the loan approval process faster for low-risk borrowers.
Speed is highly coveted across lending, evidenced by consumer demand for a faster mortgage process, with nearly 3 in 4 consumers wanting to complete the process within three weeks. A streamlined, digital mortgage process that reduces in-person meetings and increases transparency could improve customer experience.
The Inside Take on AI’s Role in Streamlining Lending for All
Artificial intelligence (AI)-powered algorithms can analyze vast amounts of data and automate most loan approvals and disbursements in minutes, but lenders must avoid building a “black box” of technology that makes decisions without transparency or fairness.
To get the Insider POV, we spoke with Anuj Nayar, senior vice president and financial health officer at LendingClub, to learn how AI can drive faster payments and financial inclusion in the lending process.
Partnering to Power Growth With Instant Loan Disbursements
Instant loan disbursements are in high demand, but lending has been slower to advance digital transformation due to perceptions about security. Modern loan systems offer updated features such as data automation, improved data management and integration with AI and compliance tools, enabling a frictionless and secure experience for borrowers and lenders.
FinTech lenders have made significant strides in instant disbursements, and top banks are now partnering with them to win and retain customers. With the lending space ripe for increased instant disbursement adoption, bringing lending into the digital revolution could be a crucial driver of banks’ growth.
Table of Contents
- A Challenging Economy Demands a Better Lending Experience
Consumers and businesses are demanding convenience and speed, but inflation and rising fraud rates are posing hurdles for lenders looking to offer a better experience.
- Modernizing Loan Origination Could Give CUs a Leg Up
Member satisfaction with credit unions took a dip in 2022, but lending is CUs’ superpower. A modern loan origination system could bring CUs back up to speed.
- Partnering to Power Growth With Instant Loan Disbursements
Instant disbursements are in demand in the lending space, but lenders — and borrowers — still cling to branches and legacy processes. Find out how FinTech partnerships can help.
- Gen X, Millennials Opening Most New Loan Accounts
Different generations favor different types of loan accounts — an important point for lenders looking to target services to the customers who want them the most.
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