17 October 2017
Abe Smith

Abe Smith

Abe Smith - Dealflo

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It’s not just borrowers who benefit from improved application processes

12 April 2017  |  6420 views  |  1

Research by Equifax has found that consumers want the process of applying for financial products online to be quicker. People want an immediate decision on loans, and a decision within a day on bigger commitments.

This presents lenders with a problem. If the two big financial scandals of recent years -  PPI and mortgage mis-selling - have taught the industry anything, it’s the importance of doing checks, and taking the time to make sure the customer really understands what they’re signing up to and being able to prove it.

What’s the answer? Equifax’s Jake Ranson hit the nail on the head when he was quoted as saying, “Companies need to invest in their application processes to improve the customer experience”.

At the moment, those processes are clunky and fragmented, and despite being lengthy, the agreements they produce are at risk of non-compliance.  There are just too many possible points of failure.  And the greater the chance of non-compliance, the greater the chance they will be unenforceable if challenged (as evidenced by PPI).  

If you automate the whole financial agreement process from beginning to end, you can increase efficiency, which of course speeds everything up. An application will take minutes rather than days to complete, and lenders can complete all the necessary checks – such as ID verification, bank checks, document checks, anti-impersonation, anti-fraud – real time.  This reduces the drop-out rate and improves the customer experience. If done well, automation will also ensure that the application process is fully compliant with the mandated process so agreements will either be processed correctly or not at all.   

But that is only one side of the equation.  Finance providers also need to be able demonstrate that they have been compliant if an agreement is challenged and this needs to be built right into the application process.  Beyond proving identity through a service like Equifax, lenders need to prove that customers saw all the relevant terms and conditions, what the customer did and that the agreement was not subsequently changed.  This not only makes the application process quicker but also legally enforceable

It’s not just customers who will benefit from a quicker and more efficient application process. Lenders will find themselves better protected against legal challenges, too.  Equifax’s research should be a warning to lenders, and be seen as an opportunity to change. 



TagsPaymentsRisk & regulation

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 13 April, 2017, 16:36

Good grief. What else will lenders need to do next? (1) Explain all terms and conditions in plain English? (2) Conduct a quiz in the middle of the application process to prove that only customers who passed with flying colors were approved for the loan? I can bet that it will be faster to fill a paper form in a branch if customers are subjected to do all this online.

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job title Founder and CEO
location London
member since 2016
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I am the founder and CEO of Dealflo, a company that automates financial agreements for companies such as Barclays, Ford, BMW, John Lewis, Prudential and Samsung.

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Ketharaman Swaminathan