It’s no surprise that COVID-19 increased demands for digital innovation across nearly every industry. As consumers embraced technology and services that simplified their ability to perform everyday tasks, they began to expect this same level of convenience in other aspects of their lives.
To the benefit of modern fintech companies, this consumer expectation shift didn’t skip the financial services industry. While ordering takeout and household essentials with the click of a button proved useful, many consumers sought this same level of simplicity in more complex areas of their lives – including purchasing a home, taking out a loan, and managing their finances. According to a survey by the American Bankers Association, the pandemic accelerated Americans’ use of mobile apps and online platforms for banking, with bank customers’ primary use of mobile apps to manage bank accounts increasing from 33% pre-pandemic to 44% in 2021.
Fintech companies have capitalized on this growing demand and are building high-quality products to quickly meet market needs. This increased fintech market advantage, paired with steep inflation and rising interest rates, has left incumbent banks and lenders struggling to grow their customer base while also trying to develop digital products to please existing customers.
Why Have Lenders Struggled with Modernization?
Financial institutions tend to approach digital transformation differently than other industries. For instance, they face steep regulations – something that many fintech companies can avoid. They also tend to be somewhat siloed and may use different tools and technology across teams or divisions. When it comes to building their own digital products, it puts legacy banks and lenders at a significant disadvantage to fintech companies that can modernize at a faster pace.
How Can Lenders Modernize in a Changing Marketplace?
Incumbent financial institutions have a significant resource at their fingertips: data. Consumer data gives financial institutions a significant advantage to drive personalized products and offerings. If lenders can tap into the data available to them, they can attract and retain customers who value the trust and relationships that comes with a legacy institution but prefer modern experiences.
To avoid spending another decade catching up to fintech companies, banks and lenders can leverage the data readily available to them to anticipate customer intent and become customer-first organizations. To modernize, they need to strive to recognize the specific needs of their customers and use that information to create hyper-personalized product offerings. This can directly support loan officers who are challenged to find new leads and generate business in today’s challenging market.
When loan officers can unlock consumer intent, they can offer purpose-built products to support stability today while helping customers reach long-term financial goals. That’s what Total Expert is all about, and it was one of the reasons why I joined the team. We help lenders modernize and introduce customer-driven innovation where it can make the biggest growth impact. After implementing and leveraging the Total Expert platform in my previous role, I understand the impact it can have on a growing organization, and I’m thrilled to help other organizations in the industry accelerate their strategies to modernize these experiences as well.