Dos and Don’ts of Digitizing Your Small Business Lending Platform
Digital transformation is an industry phrase that conjures images galore. For some, it’s a transformation that puts computers in the driver’s seat of business. For others, it’s purely a cost-control move, modernizing tools and processes to control increasing costs of operations. The reality is that digitization puts the customer’s experience squarely in the center of business strategy and operations, as Mirador CEO Trevor Dryer discusses in his recent Forbes’ article about how digitization is transforming small-business lending and “wowing” customers.
Simply, digitization makes it possible for small business (SMB) lenders to be available to SMB borrowers where, how and when they’re available to make financial decisions about the capital they need to grow – anytime, anywhere and on any device. And in a 21st-century landscape, digitizing SMB lending processes could make the difference between success and being sidelined.
To start your institution on the journey to digitization, be sure to read this step-by-step guide to digitizing your small business lending platform. We’ve also compiled the following list of 5 Dos and a Don’t to keep your digital transformation on-track.
The 5 Dos
· Do compare. Take time to see what other financial institutions, playing in your market, are doing digitally. Be sure to compare fairly. Not all institutions are the same; nor do they have the same goals or target customer base.
· Do open your mind, culture, and institution to change. Embrace change. Although change can seem jarring, it doesn’t have to be frightening. Instead, change can be exciting, bringing new processes, roles, and opportunities to an institution. So instill excitement in your team and culture about modernizing tools, processes, and outlook by the way you and your leadership team talk about change and step into it. Articulate the reasons for and expected outcomes of the temporary pain of change: better customer experience, more efficient operations, and increased profitability, to name just a few. Model change and your team may soon model it, too.
· Do allow time for transformation. Total efficiency will take time, and you can’t revolutionize everything with one project. The key ingredient to digital transformation is time. You may not realize all goals with one iteration, but with time, you, your team and your institution can realize the transformation you desire to improve efficiency and customer experience.
· Do set clear expectations. Digitization is not simply moving your current paper application to a digital platform. Rather, digitization presents an opportunity to improve how you interact with customers – both on your site and in your processes. For Mirador customers, digitization presents an opportunity to turn inefficiencies into gains and reimagine how you connect with your customers. It’s an opportunity to improve experience and operations. In fact, Mirador partner banks typically reduce application time from 30+ hours to less than 10 minutes, increase application-completion rates to 60%+ (compared to the industry average of 25%) and reduce time spent processing SMB loans by 69%.
· Do keep moving forward. Your institution can reach its goal if you and your team stay the course and keep pressing toward it. And always map every iteration, every project, every task back to your organization’s transformation goals to stay centered on your vision for digital transformation.
· Don’t try to solve everything now or obsess about entirety. Instead, think iteratively. Trying to solve everything at once is a doomed strategy. Think about your digital transformation in terms of phases. Some financial institutions find fully digitizing existing processes can take up to two years, so focus on the most significant challenge you want to solve and tackle your transformation in phases.
Digitization is like business itself – a journey. And it’s a journey that takes time to see change through to its fruition. With a mind, culture and team open to change – and a little time – digitization is a journey that can produce a transformation of your business, its efficiency and, very importantly, its profitability. For more insights on how digitization is transforming financial institutions, take a look at this success story.