DIY, the rise of self-service lending

More and more of us are turning to online banking as a convenient way to manage our money. In fact, the UK Payments Administration reports that in the first half of 2009, 22 million adults used internet banking on their main current account. This means that for the first time ever more than 50 per cent of regular internet users (41.4 million) are now banking online.

Despite this increasing customer demand, the full potential of self-service in banking is yet to be realised. While the majority of UK financial institutions now enable customers to complete basic banking tasks online, such as checking their account balance, transferring money or making payments, far less allow customers to complete more sophisticated tasks, such as loan applications, completely online. In contrast, self-service internet banking that allows customers to apply for loans is increasingly common across the Nordic region.

Many UK banks planning to improve their customer service, reduce operational costs and expand internationally are now looking to provide a more sophisticated self-service offering. To do this, they need to implement efficient web-based services for processing applications and credit analysis tools for decision making. For a more efficient customer acquisition and work process, they should look to automate data capture, objective decision making criteria and support pricing and credit approval.

Innovative ways to service banks’ clients are now possible using the web as a platform to deliver high quality information and maintain an ongoing conversation with clients. By introducing self-service for both the loan application process as well as for processing applications, banks can meet evolving customer needs for a more convenient, efficient service, thereby improving customer satisfaction and ultimately loyalty.