In a recent Forbes article, Mirador CEO Trevor Dryer discusses how common roadblocks in the lending process drive many small businesses to consider changing banks altogether. How can lenders overcome these roadblocks and retain valuable customers? In a word: digitization. And without it, many lenders may find themselves unable to compete in the 21st century.
To start SMB lenders on a path to digitization, we’ve compiled a simple step-by-step guide.
Step 1: Prepare for transformation
Preparing well for digital transformation is crucial. And institutions can prepare by considering 7 questions:
1. What’s your goal? Do you want an online application that replaces the downloadable PDF of your paper app? Or are you ready to digitize your lending process, reaping a better customer experience and operational benefits? Your goal drives your transformation, so it’s imperative to articulate it clearly and share it with your team.
2. What’s your budget? The most effective digital transformations are iterative, following a phased approach. That could mean your budget needs to stretch across more than one year, so best to budget accordingly.
3. What’s your timeline? With some planning and decisive focus, you could begin digitizing your lending process more quickly than you think, as this case study shows. Keep in mind, your timelines can be impacted by events or milestones outside the digitization project or by your organization’s ability to balance operations with change management, so be sure to identify any possible impacts to your digitization timeline.
4. What resources are available? Mirador tackles most of the heavy lifting of configuring its digital platform for its bank partners, so your configuration won’t be very resource intensive. Remember, though, successful transformation also requires modifying operational processes to support your new digital platform, so be sure to allocate some resources to manage any necessary operational or experiential changes.
5. How easily can your organization adapt to change? Digitized lending is a new way of thinking about customer experience, lending, and technology. Organizations who successfully weather transformation connect changes resulting from digitization to their goals and provide employees and customers with timely information to help them through requisite behavioral changes.
6. How open is your organization to compliance change? Consider your current compliance processes and how digitization may impact them. Is your team prepared to embrace the changes needed to digitize – changes like accepting electronic signatures?
7. What are your security considerations? From protecting customer privacy to safe data management, security is a prime consideration for financial institutions. Know what your security considerations are, identify special concerns and plan to address them during the course of digitization.
Step 2: Step into objections
Inevitably organizations run into objectors and resistance to change from within. How can leaders bring their teams with them along the journey and smooth the operational path as they go? They can guide their teams through objections by learning from other transformations, introducing iterative implementation and engaging objectors. Measurable, phased implementations can help organizations quantify ROI potential, addressing budgetary objections, and learning from case studies can be extremely helpful in overcoming organizational concerns. Keeping teams focused on the goal, reiterating the positive outcomes of digitization and how changing roles and responsibilities contribute to those outcomes may also help alleviate organizational worries. And if changing compliance processes becomes a sticking point, inviting compliance partners to participate during the planning phase can help channel concerns into efforts to identify solutions early in the digitization process.
Step 3: Translate the old process
Digitization is an experience change that enables organizations to interact with and know customers in a new way – through digital interactions that are measurable. Being able to translate the old into the new is key to reimagining the business, product, and experience digitally. For example, how could digitization change your paper-based application, how you collect supporting documentation, how and when your customers conduct business with you or what you know about them?
Step 4: Configure the new digital experience
Configuration is simply implementing Mirador’s digital platform into a bank partner’s technical environment. Mirador carries the weight of the implementation for our bank partners, so they’re free to focus on important process transformations, like changing operational processes to support the new digital experience or educating the team and borrowers about the new experience.
Step 5: Adopt changes
Digitization creates efficiencies that can dramatically improve customers’ experiences and benefit 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%. And digitized banks satisfy customers: our partners average a Net Promoter Score (NPS) of 86, beating alternative lender OnDeck’s NPS of 73 and the Apple iPhone’s NPS of 63. But to reap benefits like these, an organization and its entire team must be willing to adopt changes – whether operational, experiential or organizational – that digitization presents.
With its powerful platform built specifically for SMB lenders, Mirador is a partner who walks shoulder-to-shoulder with lenders, providing them a digital experience that’s engaging, efficient and, very importantly, profitable.