In today’s marketplace there’s a clear need to meet the customer at their location of choice, as close to the “moment of truth” as possible. For retail lending, this moment of truth occurs at the point of sale, where the purchase decision is made. Whether at the cash register, online, at a doctor’s office or the plumber or carpet installer’s truck, the goal is to deliver a consistent, painless and seamless experience. After all, the process may well start in one channel and finish in another.
Retailers, as well as their bank and credit union partners who often underwrite the credit, face a few fundamental challenges in getting the omni-channel lending process right. Let’s take a quick look at the keys to overcoming those hurdles.
The Need for Speed (Usually)
In an anywhere/anytime connected world, customers expect real-time satisfaction, including on requests for credit- especially when that offer is served up to them as a sale inducement. A retailer or service provider’s goal is to increase its “look to book” ratio- the percentage of prospects kicking the tires that follow through to complete a purchase. Naturally, the ability to offer a credit decision while the customer is still online or at the checkout counter will move the meter in that direction. A robust underwriting system within proven omni-channel lending technology can automate most of the grunt work through algorithms and data searches, serving up the information necessary for humans to provide prompt responses. This capability simultaneously addresses another key objective- reducing operating expenses in the credit review process.
“I’m a Human, Not an Algorithm”
There’s a critical exception to the “customers want immediate gratification” rule, however. Consumers with prime or near-prime credit scores have developed real-time expectations. Paradoxically, an immediate response may be a dissatisfier for those with poor credit. This is because an instant decision in such cases is almost inevitably a decline, implying an automated rejection. These individuals simply want to believe they’ve been given a fair hearing- “I’m a human, not an algorithm” is a common refrain. Other than a limited set of “hard declines” (for underage applicants, recent bankruptcies, etc.), a positive customer experience may dictate providing instant answers on acceptances only, with marginal applications referred for further offline review.
Retailers and FIs with robust underwriting systems are at liberty to choose their level of automation. ARGO’s omni-channel lending software has proven its ability to automate over 98% of the process; nonetheless many of our clients opt for a workflow in which relevant info and recommendations are routed to analysts who execute final decisions in the majority of cases. Additional review is often desired for more complex and higher ticket products like mortgages and HELOCs. Fortunately, in these situations applicants are rarely standing by awaiting a decision, and have expectations of somewhat longer turnarounds. Even here, state of the art solutions can streamline and speed the back office process.
It’s important that results - approve/deny decisions, pricing, credit limits- remain consistent regardless of channel. There should be no incentive for applicants to “shop” their request across storefronts, websites and third parties, for instance. Again, a robust omni-channel infrastructure can ensure such alignment.
Of course, none of these automated capabilities absolves lenders from longstanding due diligence and monitoring obligations- credit remains an “active sport.” Still, the benefits of near-real time responses, reduced underwriting expense and consistent decisioning can be realized through the proper application of omni-channel lending technology solutions.
For more information on improving the customer experience at your institution, read our OmniTouch solution brief .