Recently the alternative lender Kabbage launched a new app that makes the entire small business loan origination process mobile–and completely automatic. Using this app, small business owners can apply for a loan directly from their mobile phones. The application, identity verification, and approval processes are completely automated. Qualified borrowers are approved in seconds, literally. The app connects to fingerprint authentication, so funds can be instantly transferred to the borrower’s bank.
The time from opening this app to getting money into your bank account could be mere minutes.
Imagine you’re a busy, overworked small business owner. You need some cash. You’ve got two choices. Go through the traditional small business loan application process: meet in person with a loan officer, submit tons of paperwork, wait for days or a couple of weeks, and hopefully, eventually get the cash. Or, you can pull out your phone and get money in minutes. Sure, maybe the lending terms aren’t as borrower-friendly. Maybe you’ll end up paying sky-high interest rates. But the tradeoff just might seem worthwhile to you, if you’re worried about making payroll this Friday.
Wait for weeks, or get money in minutes? Which would you choose?
The idea of automating your entire small business lending program may sound crazy. Your loan officers have trained for years to evaluate borrowers effectively. Their experience is incredibly valuable. You don’t want to give that knowledge up.
And you don’t have to. But you can – and should – automate the more mundane, labor-intensive parts of the lending process. You can put borrowers through an automated preliminary screen, rejecting clearly unsuitable applicants and moving strong candidates forward to the next step of the process. You can automate identity verification so that these crucial regulatory checks are done exactly the same way, every time, eliminating the possibility of human error. You can set up automatic screens that monitor existing loans for early signs of trouble, so your loan officers can work with those borrowers to stop a potential default before it develops.
All of this is possible today. The same kind of technology that has enabled Kabbage to automate the lending process can help you streamline your own processes. Working with a qualified fintech partner, you can take your current, hands-on loan origination process that’s been refined and honed through years of experience, and you can automate the most time-consuming parts of it. Our partners have reduced loan origination costs by 25 – 50%, while freeing up valuable time for loan officers to provide more tailored service where it really counts.
Your customers want easy online and mobile access to banking, including small business lending services. Solid percentages of customers of all ages want the option of engaging with their bank online and on their phones. Even Baby Boomers like having this option–in TimeTrade’s 2016 State of Retail Banking survey, almost 70% of Baby Boomers say they like to interact with their bank online, and 30% say they like banking on their smartphones. And, as you might expect, younger customers strongly prefer online and mobile access over in-person interactions. About 75% of millennials prefer to bank online, and the same number like mobile banking, but only 48%–less than half–say they like to bank in person.
This demand for easy, streamlined access to banking — including functions crucial to small business owners like loans — isn’t going away. In fact, all evidence suggests it’s only going to increase, as millennials become a larger and larger portion of the customer base, and older generations get more and more used to banking online. By partnering with a qualified fintech partner like Mirador, you can get ahead of this trend now – instead of getting left behind.