Insights, Payments Industry, Fintech, lending

How lenders can transform customer experience with Open Banking

Modulr By Modulr on 29 March 2021   •   4 mins read
<span id="hs_cos_wrapper_name" class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_text" style="" data-hs-cos-general-type="meta_field" data-hs-cos-type="text" >How lenders can transform customer experience with Open Banking</span>

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Customer expectations have changed. The modern customer demands convenience, and they are more than willing to find an alternative if their current provider does not fulfil this requirement. As technology has evolved, the options customers now have in the world of finance have multiplied.

With so many companies offering financial propositions, the need to be competitive is greater than ever. As a result, lenders are under immense pressure. They must adapt or it's likely they'll struggle to survive.

With the arrival of the Digital Economy, smaller lenders are now effectively competing with traditional banks for customers; competition now comes in all shapes and sizes.

This new ecosystem has been created by legislative changes and Open Banking regulations that have levelled the playing field. Borrowers now have more options than ever before. 

As competition in the lending sector multiplies and diversifies, it’s clear, not all will survive, and so it’s essential lenders with ambition fulfil a few key criteria in order to genuinely remain competitive. 

Give customers the finances they need, when they need it 

In the Digital Economy, it’s imperative lenders can offer finances to their customers quickly and conveniently. The ability to evaluate customer applications rapidly and disburse loans at speed is key to competing in the future. With this in mind, it makes sense for lenders to develop platforms that work 24/7 and that can quickly identify a customer’s spending profile, allowing for fast decision making around loans and rates. 

To achieve this ambition, lenders need to move away from manual disbursement processes to adopting a real-time API-driven loan disbursement approach. Those who have modernised are already reaping the benefits, offering loans to their customers within ten minutes of application, and differentiating themselves from the competition. This immediacy is giving modern lenders the edge in the market, particularly over traditional lending institutions. 



Automate to reduce costs and deliver a superior lending experience

Automation is the key to offering instant disbursements and developing competitive advantages that make a genuine difference to the lending experience.

To reflect the importance of this priority, many lenders are focusing on automating back office payment processing, improving efficiency, reducing costs and allowing them to deliver a superior customer experience. This automation combined with efforts to automate collection and reconciliation of loan repayments is radically overhauling the way many lenders operate. 

By reducing costs, improving flexibility in repayment options and unlocking opportunities to offer better customer service, payments automation is majorly overhauling the customer experience and helping lenders disrupt the market. 

Deliver a world class human customer experience

The customer experience is one of the greatest opportunities for forward thinking lenders to differentiate in the market and drive growth. By improving the way customers engage and repay their loans while decreasing the time it takes to access cash, lenders are delivering greater value than ever before. 

Open Banking has changed the lending ecosystem and this has unlocked new opportunities for lenders to radically improve the experience they deliver to their customers.

Market leading lenders now allow for borrowing 24/7 and offer a wide variety of repayment options to meet the specific needs of the customer. These options are often accessed through a single API integration, allowing for simplicity and ease of use. Borrowers have never had it so good, and so their expectations are higher than ever. 

As the lending sector evolves over the next decade, lenders who embrace change and adapt to meet customer demand and expectations will be the ones to come out on top, especially as lenders weather the storm of post COVID economy. With particular emphasis on speed of the loan and ease of payment, lenders who simplify the lending process and improve convenience will be able to take full advantage of commercial opportunities and maximise their profitability.