Private lenders that leverage technology can realize tremendous business growth.
Lending businesses can transform their results by using technology-enabled strategies that increase their reach and boost bottomline revenue.
Technology makes interactions between financial institutions and their customers frictionless and effortless. With tech being the harbinger of innovation in the lending space, here are five tech-driven approaches private lenders can use to accelerate their reach and revenue.
- Use Technology for Lead Generation
The era of cold calling borrowers and real estate investors and telling them about your offerings is over. If you are not leveraging content to generate leads or, worse, if you don’t have a website, you are missing out on significant opportunities. Using content marketing to generate leads is a powerful strategy that forward-looking financial organizations are already leveraging.
For most people using the internet, the discovery or purchase of a service or product begins with a search engine. The same holds true for real estate investors looking for private lenders. Search engine optimization (SEO), therefore, is critical to your company’s success online; it results in organic lead generation.
With Google constantly updating its algorithms, staying on top of the SEO game can be challenging for private lending firms. High-quality content that provides value and ranks high on the SERP (search engine result pages) is crucial for bringing in leads for your business. Content that targets the right keywords and produces in traffic, conversions, and ultimately revenue is the secret to widespread reach.
Taking a software-led approach can help streamline the keywords you choose to target with your content and ensures it reaches your target audience, regardless of their geographic location.
- Capitalize on Data Analytics
Fintech lenders increased their market share of U.S. mortgage lending space from 2% to 8% between 2010 and 2016. They also managed to process their mortgage applications 20 percent faster than other mortgage lenders. All this was made possible by leveraging marketwide loan data on U.S. mortgage applications and originations.
Lending businesses are increasingly leaning on technology to decipher the plethora of data available today and to help them make smarter decisions. We are in the midst of a data explosion, but our access to the data is meaningless unless it can be leveraged to draw actionable inferences. This is where data analytics
comes into the picture.
Having access to all the data points can result in the creation of a foolproof borrower persona, which is critical to your marketing efforts and can amplify your reach.
3.Leverage the Power of Cloud Computing
From health care to fintech, organizations across a wide spectrum of industries are increasingly turning to the cloud because of the compelling benefits it offers.
Cloud technology provides the benefits of software without requiring lending businesses to invest in IT infrastructure. Cloud technology also allows you to keep operational overhead such as system administration under control. It helps too in the quicker deployment of data, which in the case of legacy systems can take ages. And, with remote work becoming the new normal in the wake of the COVID-19 pandemic, the web-based user interface the cloud offers makes managing distributed teams a seamless experience.
Applied to the lending sphere, cloud computing means all the documentation required for processing a loan can be made available from virtually anywhere in the world. Cloud technology also makes it possible for loan processing to occur without the borrower having to make repeated rounds to your office. And, because the application process is streamlined, it also results in better customer experience. Satisfied customers result in positive word-of-mouth and organic marketing, which directly translates to increased revenue.
Cloud-based loan processing software also offers your lending business scalability. It is more capable of accommodating increasing processing requirements and data accumulation while keeping the associated costs in check. Since the software is swiftly and continually updated on the cloud, lenders can take advantage of bug fixes and functional enhancements. For example, a lender can make updates in response to customer requests and, therefore, process loan applications even more efficiently.
- Automate Your Way Forward
Automation removes inefficiencies and routine manual steps from the lending process, resulting in faster processing of loans. Faster processing times give lenders a competitive advantage.
Keep in mind that automation in lending is not aimed at removing humans from the process. Instead, it allows human expertise to be applied where it is needed.
Automation relies on a predetermined decision-making process that replaces numerous manual decisions and tasks, hastens the loan origination process, and enables lenders to quickly and consistently determine which applications to fund. Automation can be used to evaluate the qualifying criteria for the appropriate level of funding, interest rate, and time period for the loan.
For example, if an application scores high on the key criteria, automated decision rules fast-track the approval process. Conversely, if criteria levels are not met, then the application is automatically stalled. Sometimes, automated decision rules may also recommend that questionable applications be sent to a loan professional for review.
At the end of the day, automation allows applications to be processed quickly and efficiently. It also allows lenders to focus their efforts on applications that are more profitable, adding to the business bottom line.
- Use a CRM for an Enhanced Customer Experience
Customer acquisition may be the basis for revenue, but customer retention and advocacy are the key to excellence. The data within your customer relationship management (CRM) software is a goldmine that you must learn to use to your advantage.
A CRM provides vital insights into the entire lending process and helps identify areas of backlog and potential bottlenecks. It also identifies opportunities for upselling and cross-selling. The bottom line is a lending CRM can help disburse loans faster and boost borrower experience and team efficiency.
A digital foundation can accelerate the overall loan cycle. The CRM is an indispensable software from the marketing and lead generation phase to the conversion and customer retention stage. You can use CRM data for analytics-driven marketing, lead scoring and microsegment targeting. All of these can take your lending business to new heights.
Access to your CRM data allows you to personalize your offering borrower preferences, leading to greater closure rates. It also allows you to predict the churn rate in advance—and helps you strategize to reduce that churn. If the CRM comes with a mobile app, your staff can access the data and documentation they need while on the go, further boosting the efficiency and contributing to the revenue.
A Note About Custom vs. Market-Ready Software
Although software integration is crucial to increasing the revenue and reach of your private lending business, a one-size-fits-all approach does not guarantee success. Some businesses may benefit from using off-the-shelf software solutions, and others may need custom software to meet their unique requirements.
Certainly, the adoption time for market-ready software is lower, but the personalization and flexibility custom software offers makes it an ideal choice for some businesses. Custom-built software solutions also give you the freedom to incorporate a wider range of technology, and you can adapt it to meet your changing requirements as your business scales.
Whether you choose to custom-built software or a market ready version, technology undisputedly gives you an edge over your competitors. Be sure to make the best of it.
Leave A Comment