The Hard Numbers: Quantifying the Value of Faster Loan Origination

The already competitive banking industry has seen a tsunami-sized wave of digital technology enter the market in recent years: Neobanks like Dave and fintech services like Nerdwallet are a few of many digital-only financial companies making it possible for customers to open up an account and apply for a loan by tapping and swiping on their smartphones, just like they’re used to with their favorite consumer apps. Throw in the historic and unprecedented digital acceleration sparked by the coronavirus pandemic, and now, financial institutions are facing a sea change when it comes to digital banking. Making it quick and easy for customers to apply for loans and high value transactions makes it easier to convert prospects into customers, enabling these digital challengers to rapidly grow their customer base and giving them a crucial competitive advantage.

How Can Traditional Banks Meet the Digital Challenge?

Taking every customer-facing step and making it 100% digital. This allows them to:

• Streamline loan processing, speeding customer on-boarding time to funding
• Reduce costs by processing loans dramatically more efficiently
• Regain competitive advantage by matching their digital banking experiences with expectations of today’s mobile-first customers

But just how much does speed matter to a bank’s bottom line? Leading research firm Forrester recently conducted a Total Economic Impact™ (TEI) study and assessed the ROI and impact gained by businesses digitally completing their bank loans with Lightico’s Digital Completion Cloud. By digitizing every customer-facing step needed to process loan applications, Forrester assessed that the bank was to complete loan applications more efficiently and execute more loans. Instead of having turnaround times prolonged by disconnected digital systems and paper-heavy legacy processes that cause friction for both customers and banking employees, loan processing requirements like document sharing, ID verification and all know you customer (KYC) and anti-money laundering requirements (AML), digital consent on terms and conditions, esignatures, are all handled in one digital session from the customer’s smartphone.

“The operational efficiencies provided by Lightico have reduced the time needed to process an account by several hours over several days. We are able to process more accounts in less time and process them more completely, with no leftover pieces needing attention.” - Digital and treasury manager, banking

Digitally completing banking loan applications also nearly eliminated the need for in-person visits - especially impactful during the first waves of COVID-19 and resulting forced branch closures - but also enabling banks to future-proof their digital customer journeys and be prepared for any challenges that Delta and other new variants may throw their way. For community bank First Bank, digitizing loan agreements is enabling them to reduce turnaround time from days to 40 minutes.

“We saw the turnaround time of account documents reduced pretty significantly, while time handling loan exceptions dipped right away. Our clients love it — The experience on smartphone is the key and they need to make fewer trips to the branch.” - Chris Bailey, SVP & Chief Technology Officer, First Bank

How Much Are Banks Saving by Swapping Legacy Processes for Digital?

Forcing banking customers to use multiple outdated processes such as filling out PDF forms, and using printers, fax machines, and scanners just to send back completed forms, required supporting documents, or fulfill ID verification requirements, not only delays processing new loans for banks while frustrating prospective customers, it increases time and resources for contact center and branch employees. How much does all of this increased overhead cost banks - and how much do they win back by eliminating it? Forrester’s study found that financial institutions and lenders are cutting costs by 250K a year by completing processing loans more efficiently with Lightico’s Digital Completion solution. And by removing the burden and frustration of handling manual processes, paperwork, and needless repetitive tasks, employee turnover dives 10% - helping businesses save 155K every year by freeing employees to accomplish more in less time, improving job satisfaction.

Quicker Completion & Cost Savings Speed Time to ROI

Assessing the total economic impact of digital completion, Forrester’s report shows that banks and lenders are gaining a 360% return on investment in 6 months or less. Digital Completion is helping traditional banks with a physical footprint compete successfully with neo banks and fintech services, while upping their digital customer journeys to meet the expectations of today’s generation of customers.