7 Steps To Future Proof your Lending Business in India

To stay relevant in a rapidly evolving lending market, financial lending companies need to be future-ready. They need to embrace technology and practices with a long term horizon. Additionally, business processes at the lending firm should be amiable enough to accommodate changes in the ever-shifting regulatory landscape in the space.

While it may sound like a task, future-proofing a lending business need not be stressful, time-consuming or expensive at all. It is not about making revolutionary leaps but about staying relevant consistently in the market. Thinking of future-proofing ideas for a lending firm is not as hard as it sounds, either.

Future-Proofing Your Lending Business

Here are some simple strategies to fast-track growth and innovation to stay ahead of the curve.

Step#1. Listen to Your Customers

For a lending firm aiming to future-proof themselves, listening to your customers is like a no -brainer but still the most relevant idea to stay ahead. Businesses need to employ formal solutions in place to actively tracking the feedback that borrowers are sending. This helps form an actionable strategy for the future.

Using polls, surveys, questionnaires, market research and social media monitoring software can help unearth invaluable insights. Listening to your customers is an intelligent and cost-effective way to stay relevant in the business.

Don’t be shy in calling for help partners, suppliers and even the general public. Inviting input from outside sources can radically multiply the number of insights and resources available at your disposal and increase the competitive advantage you have.

Step# 2. Map Your Customer’s Journeys

While the customer is the king, very often lending firms lack insight into customer behaviour which inturn spells doom. Most lending business today take the digital course to achieve efficiency.

Effective delivery of digital services can only be delivered by understanding how several functional areas work in coordination internally, independently and with customers.

Using systems that focus on all stakeholders helps deliver as promised. One great way to do this is to visualize individual consumer journeys.

• Begin with establishing stakeholders for a particular business process
• Outline roles and responsibilities
• Set expected deliverables and outcomes
• Configure necessary approvals, access, information and controls that each stakeholder requires to complete their journey

Lending management systems ensure information is seamlessly communicated one stakeholder to another. Such frameworks also help in mapping the journeys separately for each class of customers, addressing discrete bottlenecks and critical areas, preparing the lending business for scenarios ahead.

Step # 3. Improve, Don’t Reinvent

Being future-ready is hardly about coming up with game-changing concepts; however, it is about simple shifts and improvements in operational strategies that can go a long way in improving the efficiency of your business. Brainstorm how the lending business can reuse existing resources, capabilities or solutions in new ways? How can you streamline the current workflow to please your customers better? For example, firms that use lending management solutions optimize their process and achieve efficient outcomes to please their customers.

Instead of competing with rivals’ present-day offerings, have a view of where the future is heading. Keep in mind how end-users’ needs are changing and come up with a solution to catch up with these changing needs.

Step # 4. Leverage the Data Economy in Lending

Loan Origination and processing automation bring a vivid opportunity for data capturing to lending players. Lending businesses must collect and crunch vast amounts of data to uncover essential business insights, thanks to modern technologies, internet and mobile communications. With the help of insightful data, lenders can understand their customers better and capitalize on sales opportunities in the future. Tools like online surveys, data analytics programs and social media listening software can prepare businesses for the future market demands. Companies must leverage the data collected from their website, CRM system and other sources to modify their product or service for a more personalized approach to serve according to the customers’ needs and tastes better. Data can be used to adequately measure a player’s performance in crucial business segments and evaluate against internal goals or external benchmarks.

Step #5. Embrace AI Technology

Advanced Artificial Intelligence technology in the form of machine learning can help financial lending firms achieve the desired level of automation and adopt a customer-first approach. It makes it possible for a lending business to deliver high-quality financial services at speed by carefully anticipating customer needs, wants and desires. Powered by AI, lending businesses facilitate faster processing cycles, trustworthy investment advice and highly customizable services. For example, AI has replaced judgement-based human advisory rule-governed algorithms for data analysis and market-trend prediction. This advanced tech can analyze the user’s recent searches and recommend the best-suited loan products and services to suit their needs. In pleasing a customer, lending businesses can benefit in future operations. Algorithms backed with AI can also track historical payment patterns and chart spending behaviours for different borrowers, helping lending firms make informed loan disbursal decisions, making them ready for what is to come.

Step #6. Accommodate The Millenials 

Lending businesses eyeing success in future, need to accommodate the needs of the generation next when they operate. Being the first generation of truly digital natives, millennials believe in a strong sense of community. It is best to position the business in the correct light on social media. Lending businesses need to develop strategies to address these young groups, as employees and as consumers both. Networking with Millenials will help aspiring lending companies live up to their values and create an understanding of how to do business in the digital age.

Step#7. Adequate Automation of Business Lending Processes

Foresighted lending businesses make use of advanced lending software and tech systems like ERP and CRM to boost their productivity and reduce the overall cost of operations. Using the technology solutions that provide the most value for your business can be an excellent way to future-proof a lending business as it helps achieve economies of scale in the long run. Set up an automation system using the intimate knowledge of your business processes, to optimize it in the best way possible.

Conclusion

Why Future-Proof, you ask? Future-proofing a lending firm, promises vivid benefits over the long-term. It wins you new customers, attracts the brightest talent and anticipates where the best opportunities lie ahead.

In order to transform into a future-ready lending platform, firms need to consider critical implementation factors. This means adding adequate automation to the mix, making the customer onboarding process completely paperless, omnichannel and seamless experience for borrowers. They need to adhere to the demands of the new-clique of borrowers and adapt their process to suit their needs, instead of desperately searching for ‘the next-big-thing.’ Leveraging the use of data coupled with AI clears the picture of what the future has in store and allows them to adapt ahead of time.

In essence, flexibility is the essence of future-proofing a business. In spite of the positive outlook for the near future, rising consumer expectations and new technologies raise challenges for lending sector players. One of the most significant barriers to their growth remains the challenge of generating better ROIs. The only way a lending company can stay ahead in the game is by configuring a way to fill up the existing gap between customers and players. As the lending landscape evolves, lending companies which are adaptable and flexible as an intermediary enjoy better prospects for growth.