GUEST BLOG

Allison Van Rooijen, Vice President, Consumer Credit at Meridian Credit Union, shares her perspective on providing the instant digital experience customers now expect

There is the obvious profitability and cost containment exercise, but we’ve seen the rapid consumer adoption of not just digital transactions but also digital experiences. Things we thought we never could/would do online are being accepted rapidly by consumers, conducting transactions in a non-face- to-face way.

As a result, there is a new expectation and a perhaps comparison mindset in the consumer’s eyes. Why can’t I do this online? Why can’t I sign that form electronically instead of going to a branch? If I can buy a car online, groceries online, why can’t I do XYZ in the financial services space.

There is no excuse now – you can do anything online if you find a way to adapt your business model to it. Consumers will find a way to seek out those opportunities and not necessarily wait for us to make those changes. The industry is already moving this way perhaps in bits and pieces and balancing profitability and automation opportunities but not at the pace consumers are willing to adopt. The bar is now higher. The user group or pool of prospects that were willing to transact digitally before has exponentially expanded. The speed at which they transact is even faster – they are used to same day/next day Amazon delivery so expect credit decisions instantly – why should I have to wait. As a consumer, I would start comparing you outside of the financial services space and the digital experiences to other consumer companies. It becomes more transactional and then transactional becomes experiential. We must focus on improving that experience. There can be no excuse. This is the new normal. Lenders who embrace this opportunity to challenge every bit of every process and embrace the momentum at which this challenge is facing us will flourish. It’s hard but it is happening. Now is the time to embrace that digital transformation – adapt or die.

There absolutely is a place for each one of these models. It comes back to taking a step back and determining where do you want to own the experience and where are you comfortable partnering with someone who may be working with your competitors and the bureaus. Sourcing data is one perspective. Where do you want to differentiate that experience and using that in the evaluation to build, buy or partner?

The other side is looking at your company culture and capabilities. Is this something that is core to who you are? Do you have the people who can drive you forward enough, especially with this entrepreneurial lens? Can they challenge the status quo enough and do you have the time to give them to really think outside the box of perhaps what you need for this transformation?

Also, it’s important to spend time with your fintech partners to understand the roadmap for their solution. Are they going to take you as one client and build it to five to six other clients? Spend time to understand the companies you are partnering with and what their vision is. Do our visions align? You need to have those tough conversations upfront.

Then focus on governance program or regulatory perspective. Are we seeing the same thing when it comes to principles-based regulations? Are we interpreting them the same way? Do my regulatory requirements get satisfied by the practices of that partner? When you take a step back and look at full end to end spectrum, being strategic about where to partner, where to build and where to buy, can lead to great partnerships to accelerate that journey but you need to spend that extra time up front to understand where you are and where you want to be.

We’ve taken a step back and looked at whole end to end consumer lending journey from prospect shopping to loan servicing and recovery. It is a lot of take in because there are so many large components of it. Like many lenders, we have legacy pieces and bolt-ons. We had to look at where do we want to be, how can we start fresh and how big is that. When talking about architecture, it becomes a much broad conversation than just system architecture. It has really proven to us that the data team, the analytics team and the users of that data at every component of the organization – if they are going to use that data to drive models, AI, ML, they are just as invested a stakeholder in the end-to-end design as the treasury group that is going to use that data in managing the portfolio, in the credit risk group. It really doesn’t become a discussion between credit, sales and the architecture group – it becomes a fully integrated approach to architecting what the new end to end system is to ensure it is robust and scalable.

I know I speak for my partners in IT – if every time I come to them every time and say I have this great API – you just need to plug it in and it should be easy. Yes, the integration is easy but what do you do with that data? How does it sit in your data lake? Where does it integrate into your models? What is the governance of that data? Having all those stakeholders integrated that whole end to end process has been to key to our success in reimagining that process.

Fantastic time to be in lending. We’re on the brink of some pretty exciting transformation. No two deals are the same. No two borrowers are the same. Coming out of this pandemic, we have consumer adoption of digital at an all time high. We have great tools. We have a fintech sector that is thriving with innovation. Grab your running shoes because it is moving fast.

Excerpted from “Financial Services in 2021 and Beyond” webinar hosted by Kathy Stares, Executive Vice President, Americas, Provenir.