The 6 key insights customers are looking for in digital lending
Updated: Mar 28
One interesting highlight in the 2021 end-of-year fintech data summary was that year-on-year digital lending funding rose 220% to reach an all-time high of $21 billion. What this means, in simple words, is that large amounts of worldwide consumers have turned, more than ever before, to digital lending platforms for their money borrowing. But as more and more customers are getting used to borrowing funding from applications, the lenders would be wise to continue analyzing their feedback in order to keep improving their products and services.
Traditionally, when consumers applied for a loan, it was through a meeting with their local branch banker. Usually, previous lending times were, well, "long": the “average time to yes” in commercial lending took 3-5 weeks, while the average “time to cash” could have taken up to three months. When artificial intelligence is applied, and when digital lending applications operate properly, credit decisions can take up to a few minutes. Then, an actual money loan transfer should take no more than one business day. Talk about progress!
While the benefits of digital lending are obvious and include fastness, ease-of-use, and data-driven reliance, the customer experience still remains a challenge for digital lenders. Digital loan applications as well as banks’ new digital platforms are still fighting to add more consumers to their lists while trying to lower the attrition rate. The digital transformation process is still an ongoing process for both sides, as each continues to weigh the pros and cons of digital lending.
Improving digital services can only take place when lenders keep tracking and analyzing their consumers' insights and feedback. Six key insights make up the list of issues lenders must consider:
1. Approve/reject consequences: companies are now able to better manage their lending risks to customers, with improved probabilities of repayments calculations. They also employ new mechanics that constantly monitor the creditworthiness of borrowers. Lenders can also measure the customers’ feedback, whether they fully approved their loan, granted a partial loan, or rejected it altogether. The lender's learning curve for a better service continues as they monitor how their customers reacted to their decisions.
2. Find the right mix between the automacy and the human touch: while most digital systems are fully automated, companies employ some “human touch” connection points, such as customer service. Depending on their customers' reactions, they can measure the level of assistance required overall, while also finding the “soft spots” where many of their customers are not satisfied and improve upon their feedback.
3. Borrowers’ protection from taking loans they may not be able to pay back: when a lender denies giving a customer the loan he was looking for, there’s a lesson for both sides. There could be a situation where, upon checking the customer credit history among other factors, the lending company maintains that it would not be able to get its money back. When rejecting a loan, it is important to notify the customer with explanations and also to choose the right words for it. Following up on the feedback from the rejected customers can help the companies improve their decision-making lending process as well as their customer service operations.
4. The user-interface ease-of-use: users of lending applications often comment on the features ease-of-use or lack of. Some of them even offer ways to improve certain features. Tracking such comments may lead the companies’ product teams to improve on such items. It is also important for companies to test new features, keep collecting consumers’ feedback on them and make sure that their implementation goes well.
5. Locating technical bugs quickly: the last thing lenders would like to see is applications getting stuck, unable to be accessed, or have other bugs. People trust those applications to handle their financial loans without a hitch, so when a bug occurs, companies may sometimes learn about it from consumers’ complaints. Staying tuned for such comments may lead the lenders to quickly act upon such feedback, locate what and where the problems lie, and fix them immediately.
6. Comparing loan costs between digital and banking services: digital lending applications have made it not only faster for consumers to borrow money but also enjoy paying lower interest rates upon such loans. It is also easier today to compare between different apps and banks’ offers and choose the right service from which to borrow. Consumers compare and discuss their findings in forums, review boards, and social media outlets. What they comment about can lead lending companies to make better decisions with regard to the competition.
Affogata connects fintech companies to their consumers via a customer feedback analytics platform that delivers real-time data with many quantitative and qualitative features and reports. Lending services can receive immediate and accurate consumer voice analysis, tracked and monitored from all over the open web. Such AI-powered analysis, based on a comprehensive feedback collection, enables lending services to quickly understand their consumers’ position and make quick business decisions to continue improving their product and service.