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4 essential steps towards lending digital transformation for your bank

In today’s world, digital transformation has become an essential part of any successful business. To help you on your journey to digital transformation, we will show you 4 essential steps towards lending digital transformation for your bank to take. Let’s start it!

1. Digital Entry Point

Building a digital front-end for the user experience is typically the first step in moving any process online. Digitization typically doesn’t continue after this process has started. In the world of lending, this frequently means that submitting an online application results in a follow-up phone call or in-person visit. This degree of digitization has already been attained by many lenders (though certainly not all lenders, and not for all of their product offerings).

Although moving away from manual, in-person lending is a great first step, customers now demand a fully digital, end-to-end experience. It can be frustrating to start online and then be told to call or go to a branch, which frequently causes users to give up.

Although consumers have historically had some patience for the inconvenience in more complex industries like lending, this will gradually change as consumer experiences from other spheres of their lives have an impact on what they expect from the lending process as well.

2. Digital Workflow

Lenders have switched to a fully digital, end-to-end process from an online application that starts an offline process. These procedures, though, frequently resemble outdated, offline procedures almost exactly. For instance, these digitized procedures still frequently call for applicants to upload a number of documents, such as photo IDs and pay stubs, that they might otherwise have given to a lending officer or underwriter in person.

In order to closely resemble the experience of visiting a physical branch, the uploaded documents are then manually reviewed by a bank employee in an office. Due to the lengthy nature of the manual back-end processes, loan origination times are frequently delayed. This can also cause many users to give up on the process altogether. This procedure is sometimes referred to as the digitization of old procedures.

Many lenders now offer a fully digital process for all customer interactions, which is a significant improvement. The journey is still not over, though. The possibility of fundamental process improvements can only be unlocked by first fully digitizing the origination process.

3. Automated Determination

Not only are you trying to convert your current front-end processes to a digital interface in this step, but you’re also trying to figure out how to change the approval and closing processes to benefit from specific digital capabilities for both your customers and your employees.

All applicants should be able to receive instant underwriting decisions thanks to a fully automated process, ideally through a soft credit pull that doesn’t lower their credit score. There is little need for underwriters to review policy exceptions based on “compensating factors” once automated decisions that can process large amounts of data have been implemented. With newer technologies, those decisions can be automated and enhanced. This may result in quicker decisions, improved credit outcomes, and content customers.

4. Making Sensible Decisions

Lenders can further enhance results by using cutting-edge tools like machine learning to guide better judgment. Through further advanced analytics, this enables lenders to not only automate their antiquated processes but also significantly improve them. Utilizing these technologies enables banks to grow their loan portfolio with current clients as well as draw in and grow new households—all without raising the risk of their portfolio.


Every bank has the 4 essential steps for digital lending transformation top of its mind as they move toward a fully digital experience. They are more aware than ever of the value of enabling digital customer interaction with the bank. The underlying processes must often be rebuilt in order to take advantage of those digital capabilities if you want to fully reap the rewards of a digital transformation. Contact SmartOSC Fintech today so we can assist you with this.

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