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As economic stability increasingly looks like a thing of the past, what does this mean for traditional banks? With disruption after disruption in the financial services sector, it’s clear that resiliency is a must. According to McKinsey, “banks will need to become more resilient and reinvent their business models to ride out the current volatile period and achieve long-term growth and profitability.” But what does reinvention really mean? And is it possible to reinvent your business models quickly? We’re looking at some of the key challenges the banking industry is facing, and the ways that upgrading credit risk decisioning capabilities can help solve for some of these challenges.

But it’s not all dire. Banks can be uniquely positioned to effectively deal with these disruptors. As Siobhan Byron writes, “established banks, though still only recently starting to harness the power of digital, have a key advantage over new entrants. Their decades of institutional knowledge is difficult to build up quickly.” Banks are also in a better position to deal with market shifts than they were a decade ago – if they can leverage data analytics and automated workflows to make “better and more informed credit decisions.”

So, if you’re a bank, what can you do? Look for ways to leverage advanced technology like artificial intelligence and machine learning, automated credit risk decisioning, and data integration to improve efficiency, reduce costs, and renew your focus on customer-centric products and services.

Increase Efficiency: Machine learning algorithms can enhance your credit risk models, processing vast amounts of data quickly and reducing the time and person-power needed for risk assessments and credit decisioning.

Reduce Costs: Automating your credit risk decisioning process reduces the manual labor required, allowing you to allocate resources to other strategic initiatives that can help grow your revenue and improve the customer experience.

Enhance the Customer Experience: Focus on frictionless onboarding and customer management, with faster credit decisions, digitized processes, and more personalized product offerings (including everything from interest rates to loan terms, upsell/cross-sell offers, and even optimized collections strategies).

Improve Risk Management: Advanced analytics can enable you to identify key patterns and trends in customer behavior, ensuring more accurate risk assessments and reduced losses due to defaults and improved fraud detection.

Enable Agility: With more flexible, user-friendly decisioning technology, you can make changes to decisioning workflows quickly, respond to market shifts, meet changing consumer demands, and launch new products faster to stay ahead of your competition.

Foster Innovation: Enabling all the above points (with more automated decisioning, advanced analytics, superior data integration, improved efficiency, etc.) means you can foster a true culture of innovation. Allow your teams to focus on strategic initiatives, competitive insights, and innovative product development for customer-centric offerings that can help put you ahead of the competition.

The larger the bank and the more complex the systems, the more daunting it can feel to implement any changes to your decisioning software or data sources. But fear not, follow some simple steps to incorporate tech upgrades into your credit risk decisioning – and remember, it’s not all or nothing: look at decisioning solutions that can easily work alongside your existing systems and/or partners that have experience replacing legacy systems to ensure a smooth transition.

1. Assess Current Capabilities: Evaluate your existing credit risk decisioning capabilities and identify areas where you can improve your processes.
2. Define Your Objectives: What are your goals for upgrading your tech? Prioritize the areas that are most important for you (i.e., reducing costs with improved efficiencies, versus enhancing the customer experience with increased digitization capabilities).
3. Select Technology Capabilities: Choose what is most critical to upgrade – is it automated risk decisioning, machine learning, data integration?
4. Choose Your Solution: Outline a plan for integrating the chosen technology into your existing systems and workflows, with a partner that can help with timelines, resource allocations, and important milestones.
5. Test and Iterate: Be sure your chosen risk decisioning solution offers you the ability to test workflows, refine your credit models, easily integrate new data sources, and iterate your processes – on your timeline, not theirs!

With the right technology in place, not only can you accomplish all the goals set out above, but you can more easily maximize the value of your customers across the entire lifecycle. Because with upgraded credit risk decisioning, you can more efficiently move beyond credit origination and onboarding and bring that customer-centric experience to all the financial services products you offer. As McKinsey points out, “banks that have already embedded high-performance credit-decisioning models into their digital lending have reaped three key benefits,” including increased revenue, reduction in credit losses and gains in efficiency. So, what are you waiting for?

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Banking UX plays a vital role in meeting customer expectations.

Customers have certain expectations regarding interactions, experiences, and treatment from their banks. Previously, banking interactions were limited to visiting a local branch, speaking to a teller or manager, and completing necessary paperwork. However, with the advent of technology, banking has rapidly evolved.

Face-to-face interactions have been replaced by automated processes, paper-based interactions have gone digital, and AI assistants have taken over from human tellers. As a result, the banking UX has become more complex. In this digital-first world, it’s crucial for banks to ensure their banking UX meets customer expectations to enhance the overall customer experience.

In 2011, Ayse Saygin, a University of California at San Diego professor in the department of Cognitive Science explored the “uncanny valley.” Essentially, the uncanny valley hypothesizes that when man-made objects become too human, in animation or robotics as an example, humans become uncomfortable. The point where discomfort develops is known as the “uncanny valley” and it makes us want to run for the hills.

Stick with me, I’ll get to what links the “uncanny valley” to expectations, technology, and banking UX design soon… but back to the experiment.

Professor Saygin attached viewers to an MRI, testing their brain activity when shown different versions of an android. When they were shown an android with human qualities people’s brains lit up like a Christmas tree. Their brains were working overtime trying to make sense of what they were seeing.

“What we found was that if you’re going to get so close to what the brain considers a person, you better get it right,” Professor Saygin says in Huffington Post. “The brain is not very tolerant of deviations from that.”

The android didn’t meet their expectations of a robot and it definitely didn’t meet their expectations of a human. The experience wasn’t right.

More and more, as people tune into the inner workings of technology and digital experience, our tolerance for misshapen design and snake-oil gaming in user flow has plummeted. Virtual assistants that take you in circles makes people insane. Social media algorithms can be mind-numbing. Who among us hasn’t considered hurling our phone into an active volcano after a phone pop-up ad follows your thumb around?

We know when brands are trying to game us. Like Professor Saygin’s uncanny valley testing, we know when something feels off in user experience design. When it comes to real, on-the-ground needs like the digital mortgage experience, understanding the human experience–the stress and harrowing spending that the average person experiences while finding a place to live–is essential. The digital mortgage UX is the last frontier that people want littered with inadequate attempts at tapping into the human soul.

When UX is genuine–when it recognizes the pitfalls and joys of being a real person–it can soar. We, the people, no longer tolerate passive aggressive UX that appears out of touch with the noisy waters of the digital world. So, what makes for a genuine UX?

• Be bold and cohesive: Craft a look and feel that doesn’t just digitize the brand’s mission. It is the mission.
• Don’t forget the human touch: While digital assistants and chatbots can be incredibly useful, banking services can be extremely complex. Make it easy for your digital users to get in touch with a human if they need to.
• Create emotional experiences: In the age of experience, users search for emotion to make a connection to a product.
• Anticipate: Integrated analytics that help you anticipate your customer’s needs and make the right offers.
• Serve don’t sell: In a world of fake news and too good to be true offers it’s time to be the guide not the salesman.
• Keep it simple: Navigating your user experience flow shouldn’t be a challenge. Test and test again to make the route to success as simple as possible.

I’ll use mortgages as example again as let’s face it, buying a house is one of life’s great mountain climbs. It’s our homes we’re talking about, the place where we’ll live and name our dog after a Game of Thrones character. There are already hills of paperwork and expenses that make it a little harder to breath, which makes it vitally important that lenders provide an experience that anticipates and counteracts moments of stress.

Actually, smart UX should guide us through its service like Marlon Brando’s character Jor-El in the 1978 film Superman: A benevolent, all-wise parent. Let’s say we call this the Superman effect in UX: When parental free-floating apps and digital experiences lead us, pragmatically, to the thing we find most valuable.

If that sounds like climbing Everest, it’s not; we’re already there, and the technology is ready. Fintechs are already working to make a digital mortgage experience that doesn’t send customers running for the hills. A TechCrunch op-ed stated:

“Closing a home loan today takes more time and has become more difficult and costly than ever imagined…The good news is that both of these problems are being aggressively tackled by tech companies working to transform the mortgage experience and bring lending into the digital world.”

UX that’s inspired by a true understanding of what people are going through is the first rung of a step ladder that leads to customer loyalty. When brands employ technology that is harmonious with customers’ human experience, when it leads us and we, in turn, lead it, there will be no running for the hills. Instead we’ll wander hand in hand through the meadows!

But, the moment we feel that design is over-reaching or brands are using the space disingenuously, whether it’s the oddly humanistic qualities of robotics or an app that gets us into owning a house quicker, the whole experience becomes unharmonious. When technology doesn’t guide us, seamlessly and invisibly, it becomes UX’s uncanny valley.

Keep up in today’s digital mortgage revolution.