At the recent Retail Banking Transformation Americas conference in Charlotte, NC, I had the pleasure of co-moderating a roundtable discussion alongside Ron van Wezel, Strategic Advisor at Datos Insights. The session, titled "Navigating Innovation During the Age of AI: The Intersection of Technology, Customer Experience, and Operational Efficiency in Lending and Deposits," brought together industry leaders to explore the future of retail banking. From addressing pain points within the lending landscape to exploring ways to leverage technology and AI, attendees uncovered key insights into the current state of lending and where it’s headed.
We began by examining the significant shifts in consumer and small business behavior that are driving the need for enhanced lending offerings. The consensus was clear: customers now expect a seamless, efficient credit application process. This also applies to the in-branch experience, which is still alive and well, even among younger generations. Datos research reinforced this, showing a strong preference for digital channels that streamline applications, accelerate credit decisions, and expedite fund disbursement. This shift highlights the imperative for financial institutions to meet these evolving expectations with innovative solutions.
Our discussion then delved into the pain points and inefficiencies currently plaguing the lending landscape. Financial institutions are preparing for a surge in credit applications as interest rates eventually decline, though the timing remains uncertain. Training staff on new automated processes is crucial to scale effectively, yet it remains a challenge. Liquidity issues have led some credit unions to outsource mortgage portfolios, inadvertently creating new inefficiencies.
Manual back-office processes continue to be a bottleneck, impeding the delivery of the streamlined experiences customers demand. Furthermore, income and ID verification processes, while essential for fraud prevention, introduce friction into the onboarding journey. Capacity to innovate and grow portfolios is stymied by the necessity to manage ongoing operations effectively.
One of the most engaging parts of our discussion was exploring how lenders can leverage technology to deliver personalized, seamless customer experiences. Attendees emphasized the importance of user-centric design, omnichannel integration, data analytics for cross-sell, and robust digital self-service options. However, interacting with customers who primarily use lending products remains challenging due to the limited scope of these relationships (ie. infrequent automated payments).
To combat this, it’s vital to analyze the end-to-end digital self-service process to identify and mitigate friction points that lead to customer abandonment, but also take advantage of cross-selling at the right point of process - not just add the end via out of band email comms. We also discussed the power of personalized services, such as offering support in multiple languages, which can significantly enhance engagement and retention.
AI's transformative potential in lending and deposit technologies was a key focus. Financial institutions are already leveraging AI for smart credit decisioning, risk assessment, and compliance management. Combining rules-based systems with machine-learning models has shown promising results in optimizing client experiences.
Innovations such as biometrics and AI-driven processes are being explored to further streamline operations and enhance security. A particularly interesting point was how mapping application drop-off data with call center interactions can provide valuable insights to refine and optimize customer retention strategies.
Although briefly touched upon due to time constraints, ensuring regulatory compliance in a rapidly evolving technological landscape remains crucial. While there are few significant industry-wide initiatives, collaboration between regulatory bodies and industry stakeholders is vital. The key challenge is to share data while maintaining consumer confidentiality, a balance that is essential for fostering trust and innovation.
Our roundtable at the Retail Banking Transformation Americas conference underscored the critical role of AI and specialized SaaS platforms in revolutionizing lending and deposit processes. By understanding and addressing the shifts in consumer behavior, optimizing operational efficiencies, and leveraging advanced technologies, financial institutions can better meet customer expectations and drive innovation. However, maintaining regulatory compliance and fostering collaboration will be essential for sustainable growth in the age of AI.
I look forward to continuing these important discussions and seeing how our industry evolves to meet these exciting challenges.
Interested in exploring how Amount can help your institution leverage technology and AI to enhance customer experience, drive efficiencies, and gain a performance advantage? Reach out to sales@amount.com to learn more.