Omnichannel lending means that lenders can provide loans “in all ways or places.” “Omni” is derived from the Latin word “Omnis” meaning “in all ways or places.” The channel is the way the customer interacts with your company.
With the proper software, a lender could enable loan applicants to go through the lending process in a variety of channels. The customer can address their loans in person, online, by a phone call, a text, or an email. All those different channels then run through the same software, keeping reliable records on each customer all in real-time.
For example, a loan applicant may apply for a loan online but decide to be funded at a store location. They may originate their loan in the store but make payments or take draws via their mobile phone. Lenders who provide an omnichannel experience are providing the best customer experience in lending.
If you are not operating in this fashion today, you are running the risk of losing customers to your competition.
For nearly a decade, the trend of consumers preferring to have transactions online has steadily increased. Considering the events of 2020, the desire to have transactions take place entirely online has grown dramatically. For some consumers, an experience that requires little to no human touch has become a requirement.
According to research done by Clarity, the industry has seen an increase in funded loan volume, the number of loans, and the number of unique borrowers for installment and single payment loans. This explosive growth started in 2014, with a 208% increase in installment loan volume, a 143% increase in the number of installment loans, and a 124% increase in the number of unique borrowers. This growth has only continued, with an average yearly increase of 32% in funded loan volume from 2015-2019.
This means that more people are taking out more loans in larger amounts, and they are doing it through digital channels. If there is not a digital channel for your business, you are missing out on potential customers.
Historically the idea of true omnichannel lending was met with some hesitation.
Lenders in the Mid-2000s had some fears of becoming an omnichannel lender due to the need for numerous software and the high cost of managing.
Lenders who had both online and retail presence felt the need to create a wall between the online and retail sides of their business. They had different lending platforms to support both, frankly, because there were not lending platforms that supported both.
Using two different systems for the same business caused a lack of visibility across their organization. If a customer got loans both online and instore, there were two customer accounts and histories for the same customer. This duplication of customer information made lenders unable to properly underwrite their loans.
To make matters worse, the solution to keep consistent customer records was a complex data warehouse. These warehouses required massive costs to manage, maintain and mine for usable data.
To navigate the changing consumer lending landscape, you need a lending platform that can remove all those barriers. You need a platform that gives your customers the ability to engage in the entire loan process how they want. This platform should be one place for ALL your customers.
If you’re interested in seeing firsthand what an omnichannel lending platform could do for your business, please click here to schedule a demo.
Clarity’s 2020 Alternative Financial Services Lending Trends Report: https://www.clarityservices.com/thank-you/claritys-2020-alternative-financial-services-lending-trends-report-thank-you-prelaunch/