With the rise of online lenders and traditional financial institutions offering digital services, borrowers have more options than ever. Lenders who want to stay competitive in an oversaturated market must find ways to enhance the borrower experience. That’s no mean feat, considering customer expectations for seamless buying journeys have never been higher.
Luckily, there are tactics and technologies lenders can deploy to optimize borrower experiences. Below are six strategies you can use to reduce friction in the borrowing journey and drive greater customer satisfaction.
1. Streamline the Loan Application Process
Are you struggling to connect with borrowers? Start by evaluating your application and onboarding procedures. If borrowers aren’t making it past the first screen or two, that might be something you can quickly fix. A user-friendly digital platform is a must for lenders looking to guide borrowers through the process and facilitate digital document submission.
Providing an easy-to-use portal that prefills application forms with data from previous interactions reduces the time and effort required from borrowers. Just as importantly — if not more so — it minimizes errors. When borrowers use intuitive, self-service platforms for verification of income, tracking application progress, uploading documents, and receiving updates, they’re empowered with control and convenience.
2. Make Customer Service Feel Personal
Borrowing money can be a complicated and even emotion-fraught undertaking. A certain amount of hand-holding is required — you definitely don’t want to leave your customers in the lurch. Dedicated loan officers or customer service representatives are needed to guide borrowers through the process. They help ensure that borrowers understand each step and correctly submit critical information.
Do you want to be available outside of standard business hours? Artificial intelligence is a great tool for bridging gaps in customer service. AI-powered virtual assistants can answer common questions, guide borrowers through various steps, and automate tasks like document submission and income verification. Leveraging the right combo of AI chatbots and human assistance can offer personalized customer service that helps build trust with borrowers throughout the lending process.
3. Be Transparent About Loan Terms and Fees
Whether you’re following legally mandated requirements or believe it’s simply good business practice, transparency matters for lenders of all types. If you want to build trust with borrowers, clear loan terms and fees are essential to the relationship. Make it easy by adding a FAQ page to your website. This content can answer commonly asked questions in simple language.
But don’t stop there. Loan officers should confirm that borrowers understand their loan terms, interest rates, and repayment schedules. After all, the goal is for your borrowers to have a positive experience and pay back their loans someday. Make this happy result more likely by ensuring borrowers know what they are getting into.
4. Offer Rapid Approval Decisions
You’ve doubtless heard the adage “Time is money.” Nowhere is that principle more applicable than in the lending landscape. If it takes too long for your borrowers to hear whether they’ve been approved, they’ll likely seek a loan from another source. When customers go elsewhere, that means no money from interest collected for your institution.
Fortunately, lenders that use technology to assess borrower data quickly can provide pre-approval decisions within minutes. Getting the good news fast is one sure way to encourage borrowers to come to you for their loans. And as a bonus, being considerate of their time helps promote customer retention.
5. Be Mobile-Friendly
It’s no secret. Companies today must be mobile-friendly to succeed with customers. Most people — including potential borrowers — spend a lot of time on their devices. They use their smartphones to do research, browse websites, apply for jobs, and even conduct financial transactions like banking or bill paying. You might well be reading this on a mobile device right now: case in point.
As a lender, make sure the platforms that your customers use to access your services are ADA-compliant and mobile-friendly. This includes having a mobile-responsive website and the right plugins to enable document uploads, real-time updates on application status, and access to necessary information. If you don’t offer borrowers a mobile-friendly experience, they’ll seek out competing lenders who do.
6. Add a Human Touch
In a world of digital touchpoints and automated replies, it’s easy to forget about the people on the other end: your borrowers. As a lender, remember that the people you serve have a whole world of things going on in their lives. When you take those demands into account and strive to make customers’ lives easier, they will gladly do business with you. They might even become your biggest advocates.
A little effort can go a long way in relationship building. It only takes a minute to send a personalized email to make sure a borrower has what they need and understand everything. By promoting your customers’ well-being, you help ensure they’ll choose you for their future lending needs and refer you to family, friends, and colleagues.
A Borrower-Focused Strategy Is Well Worth Your While
Borrowers have many choices regarding where they go for loans, and they don’t want friction or confusion at any step. If you wish to stay competitive, you must offer a well-functioning platform, top-notch customer service, and transparency around terms and fees. When you add the latest supporting technologies and a human touch, you’ll create a loan journey borrowers will be eager to take.