Designing Your New Normal Post-PPP
Your systems have been pressure tested like never before, and improvement areas have never been clearer to all levels of leadership. What’s your vision for a new normal post-COVID as you set out to find better technology?
The future of lending is a personalized customer journey, the ability to provide personalized attention to 100% of all applicants every week, while being able to quickly modify that journey through no-code workflow templates, and templates that provide instant process updates for staff and applicants alike.
While there’s unlimited demand for cash, lending products themselves are often exactly the same from lender to lender. For years, backend systems have helped with efficiency but done little to truly increase team capacity to work with more clients at any given time without sacrificing rapport and a personal touch. Yes, there have been marginal gains in capacity that come with backend implementations, but until your Loan Origination System is able to seamlessly incorporate applicants into a team-wide workflow your customer journey will be full of gaps that extend approval and review times.
When PPP hit, many lenders were primarily concerned with 2 pain points...
1). How will we manage dozens and/or hundreds of applications in such a short period of time?
2). What are the core requirements for approval? It would take time to build a new application process.
As a result, lenders who had been holding off on technology upgrades, for better or worse, wound up with systems that crashed, constant overtime, and the need to pull in staff from all corners of the organization to assist with reviewing, collecting, and organizing information. There was so much work to be done that expectation management with existing and potential customers became more of a nice to have versus a must have.
Having worked with small businesses during COVID, You’ve likely already been taking stock of what worked and what didn’t. How might technology have eliminated disruption amongst staff, and at the same time wowed a myriad of new potential customers who weren’t able to complete the PPP application with their existing banking relationships?
How many new and existing client relationships might have been strengthened through excellent expectation management?
There’s been stories of loan officers working 60-80 hour weeks. Some CDFIs had to turn down emergency grant and loan opportunities that would not only help small businesses, but provide game changing revenue to their organization because of capacity concerns. Realizing that an old process is outdated, or is prone to breaking, when you’re hit with a spike in volume has more downside risk than you can imagine. Pressure has a way of spotlighting friction points and there’s now a great opportunity for lenders to ride a wave of technical innovation that’s solving for the friction points that historically kept their program capacity limited.
As we all look forward, lenders continue to improve and retool themselves with the latest technology.
What became obvious was that the biggest challenge was one of logistics. How to collect, understand, approve, and organize data from dozens or hundreds of applicants at the same time.
This an important insight thinking about the prioritization of innovation when it comes to making decisions on new lending technology. A challenge that existed prior to PPP, and must be solved post-PPP.
It's not uncommon for Lenders to focus on end-to-end solutions and faster underwriting tools while the macro trend in technology is specialization. In contrast, when we ask front line loan officers and business development personnel how much time is dedicated to updating applicants on progress, confirming receipt of information, and pursuing inactive applicants their answer is typically at least 40%. The issue of collecting and understanding information while effectively managing expectations is actually more challenging than a faster underwriting system.
We've heard stories of loan officers working 60-80 hour weeks. On the organizational level, due to capacity concerns, some CDFIs had to turn down emergency grant and loan opportunities that would not only help small businesses but provide game changing revenue to create more impact. Realizing that an old process is outdated, or is prone to breaking, when you’re hit with a spike in volume has more downside risk than you can imagine.
Either way, pressure has a way of spotlighting friction points and there’s now a great opportunity for lenders to ride a wave of technical innovation that’s solving for the friction points that historically kept their program capacity limited.
If you're interested in learning more increasing both lending team capacity and customer satisfaction at the same time, we'd love to hear from you!