Despite the 2008 crisis, borrowers still associate banks with reliability, stability, and low risks. These are some of the main reasons they choose to go with a large-scale enterprise like a bank and a credit union. But the problem with those institutions is that often they aren’t really up for the challenges of the digital age. And intelligent lending automation is the key to changing that.
With the development of technology, banks’ competition in the form of POS financing programs and alternative lenders started to grow. That’s exactly why 70% of banks heavily invest in technology. Bankers realize that to survive they need to strengthen their competitive positioning and grow/sustain their market share.
And in today’s market, you can only retain and convert borrowers if you deliver a smooth online experience, same-day approval, and cybersecurity while maintaining competitive rates.
Banks and credit unions have a way harder time digitalizing their services and products due to legacy core software that is in desperate need of a radical revamping. The problem is that creating a proprietary system for an efficient lending platform from scratch is often out of the question. It simply requires too much money and human resources. Not to mention that once it’s live, it needs to be constantly updated, supported, and maintained to stay competitive.
But if you go with ready-made lending automation, maintaining, securing, and updating your lending software is simply not your headache. The software provider is responsible for that.
How to choose a lending automation solution for a bank
There’s this notion among bankers that ready-made software solutions aren’t flexible, scalable, and sophisticated enough to power lending operations of a bank or a credit union. And in today’s technological age that’s simply not true. Advanced FinTechs are here and they are perfectly capable of addressing the needs of enterprise-level financial institutions.
All you, as a lender, have to do to fully automate your crediting process is choose the lending automation software carefully. Some of the things to consider include:
- Intelligent credit decisioning
- Business logic customization
- Compliance readiness
- Vendor track record
You can check an in-depth guide to choosing the right lending automation software here. But in a nutshell, to successfully compete in the digital environment you need the right tools. So don’t settle for half measures. The lending automation solution you end up using has to address all of your business needs as well as the needs of your borrowers and your employees.
Lending automation for banks done right
Compared to micro and alternative lenders, banks and credit unions have a drastically different set of requirements when it comes to lending automation. These companies tend to already have a sizable business infrastructure in place and whenever they implement new automation solutions, they need to make sure it integrates well and communicates with the core banking system smoothly.
TurnKey Lender offers intelligent end-to-end functionality sufficient to automate any type of lending task for crediting business, no matter the size or specialty. The trick is that small to mid-size lenders with similar requirements get the TurnKey Lender Box solution. It’s ready-for-use within one business day and fully automates the lending process from the get-go.
Larger institutions, with custom requirements, get TurnKey Lender Enterprise. It’s a fully customizable system powered by AI which can be adjusted to whatever needs a business may have. And since we’re focused on banks and credit unions in this article, we’ll take a closer look at this one.
TurnKey Lender Enterprise is a modular system that includes functionality to automate:
- Loan origination
- Collateral management
- Borrower evaluation
- Risk management
- Debt collection
- Loan servicing
- Regulatory compliance
- And more
You can get all of those as an all-in-one package or only implement the solution’s separate parts into your legacy system to automate the things you struggle with most.
And to answer your question about scalability, according to an independent performance test by Hewlett Packard, TurnKey Lender is a flexible configuration choice on a highly scalable and reliable infrastructure. It processes large loan application volumes (100+ per second) without skipping a beat and lowering risk evaluation standards. On the contrary, improving them, given that the scorecard is set up properly.
I know these kinds of numbers may not easily map on a run-of-the-mill bank. But answer me this, how much time would it take an origination department to process 100 applications?
TurnKey Lender integrates with the core banking system as well as all the necessary third-party products and data sources required for running a modern digital lending operation. The system has a drag-and-drop business logic editor built-in. It allows for in-depth customization of the solution’s architecture on the fly. It effortlessly does things that would previously take weeks to develop, design, and deploy.
But probably the biggest benefit of implementing TurnKey Lender’s automation are the self-learning deep neural networks and machine learning algorithms within the proprietary scorecard. They serve as a basis for the state-of-the-art decisioning engine that helps your lending operation process and approve more loans while increasing risk. This is achieved through a careful combination of traditional and alternative data sources and analytical approaches used in borrower evaluation and risk management processes.
Another big thing for banks, or any respectable financial business for that matter, is cybersecurity. TurnKey Lender employs a certified ISO 27001 auditor, who has a Ph.D. in Cyber Security. The solutions of the company also meet all the international standards according to the ISO 9001:2015 certification. The company has been accredited by the Singapore government to work with state and enterprise-level institutions. Very few companies get accredited by IMDA due to their high standards so their vote of confidence shows that TurnKey Lender cares greatly about the quality and security of the solutions and is a partner to be trusted.
Lending automation and overall crediting digitalization are inevitable. If they are to survive and prosper in the digital age, banks, credit unions, and other large-scale lenders will have to adjust to the new market realities. But worry not, this process doesn’t have to be painful and outlandishly expensive. Get in touch with TurnKey Lender and schedule a demo of the system. See what lending automation can and should look like.
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Study of 50,000+ UK banking app reviews reveals customer ‘frictions’ among prominent retail banks
o Login and user authentication: Nearly a third (30%) of digital banking app customers had issues with logging into the app through their devices, and 1 in 5 (20%) cited problems with username and password or passcode authentication
o Customer service:
§ Nearly a quarter (24%) of customers felt like they were waiting too long for customer support
§ Over 1 in 5 (22%) were unhappy with the customer resolution
§ Over 1 in 10 (16%) customers cited that the support over chat was unavailable or not useful
o Notifications: Almost a quarter (24%) cited that the wrong operation – or none at all – was performed when they clicked on the notification icon. 23% didn’t receive notifications for payments while 1 in 5 (20%) received too many notifications
Today Mobiquity, a full-service digital transformation enabler, launches a ‘Friction Report to benchmark UK & NL mobile banking apps,’ identifying ‘frictions’ within the UK digital banking app customer experience.
The study of 50,000+ UK customer banking app reviews within the Google Play Store and the App store shows the main ‘frictions’ across prominent UK retail banks.
One of the key issues was with login and password authentication. Nearly a third (30%) of digital banking app customers had issues logging into the app through their devices and 1 in 5 (20%) cited problems with username and password or password authentication.
Another ‘friction’ was customer service; nearly a quarter (24%) of users felt like they were waiting too long for customer support.
Almost a quarter (24%) cited problems with notifications. Either the wrong operation was performed, or no operation was performed at all when they clicked on the notification icon. 23% didn’t receive notifications for payments while 1 in 5 (20%) received too many notifications.
Meanwhile, over 1 in 5 (22%) were unhappy with the customer resolution, and over 1 in 10 (16%) customers cited that the support over chat was unavailable or not useful.
Commenting on the report, Matthew Williamson, Vice President of Global Financial Services, Mobiquity said: “As the use of digital payments increases during the pandemic, so has mobile banking usage. The launch of Mobiquity’s Banking Friction Report helps banks to identify the ‘business frictions’ in their mobile banking experience to help align with evolving customer expectations.”
“An interesting observation that can be made is that most of the banking apps in the Google Play and App store score highly, but when you only account for reviews where people actually leave comments regarding an app feature, i.e. feature ratings, scores are quite low. This can be attributed to users no longer having to proactively go to the Google Play or App store to rate an app, but now are prompted to review an app while they are using it.”
“Nowadays, banks cannot risk treating their customers as passive observers, building products and features that do not take their feedback into consideration. Looping customer feedback into the decision-making process is key as banks get real-time information regarding which aspect of the app customers value the most, and where they find the most friction while interacting with the app.”
The future of offshore banking
By Granville Turner, Director at Turner Little.
Despite its misconceptions, the popularity of offshore banking is growing. Not only is it a perfectly legal way of holding your money, but with the right professional advice, it is also reassuringly simple to open an account.
This ease-of-use is prompting many offshore banks to change their offering to compete and make overseas banking even more accessible. No longer is it limited to just the super-rich.
So, what does the future look like for offshore banks? We’ve compiled a list of the top fundamental changes happening in the realm of offshore banking.
Catering to niche markets is the future
Rather than managing account holder’s money in general, offshore banks are tapping into how they can best serve different demographics. Essentially, it is about taking a more bespoke approach to managing money at various stages of life.
But catering to a variety of markets doesn’t just stop there. Many overseas banks are now accepting crypto as a form of currency to appeal to digital, tech-savvy generations.
Cryptocurrency is also attractive for those who see the security benefits it can offer.
Paper chains are fast becoming a thing of the past
As banks move away from paper in favour of digital, security is on everyone’s minds. This is because information is an important asset to many businesses, so protecting it is vital. As such, banks are securing data with the most vigorous encryption security standards.
For account holders, this means digital bank transfers and communication become less of a risk and the smarter thing to do. Paper chains are fast becoming a thing of the past.
Instant access, day or night
In today’s digital world, you don’t need to travel overseas to open an offshore bank account; everything can be done online or over the phone. And like most UK standard current accounts, many offshore accounts now offer online and mobile banking features. So account holders can manage their offshore finances and investments while transferring funds with ease.
Offshore banks are following the same route of challenging onshore banks by going branchless. This offers substantial benefits for account holders, as branchless offshore banks don’t pass on as much overhead costs to the customer. Ultimately, this means customers can earn better interest rates and other returns on their investments.
Happy to help
At Turner Little, we work closely with offshore banks to provide you with quality service tailored to your needs. With over 20 years of international banking experience and specialist expert knowledge, we will assist you with your enquiries, no matter how complex. And every account we arrange comes with internet banking, card facilities and the ability to transact internationally.
Hong Kong’s First Multi-Cloud Challenger Bank Goes Live with Temenos
- WeLab Bank designed, built and launched using cloud-native Temenos Transact in less than 10 months
- WeLab offers next generational digital services for the 7.5m people in Hong Kong to access from their mobile phones
- Customers can open accounts remotely in just 5 minutes with bank reporting 10,000 account openings within 10 days of launch
Temenos (SIX: TEMN), the banking software company, today announced that WeLab Bank, Hong Kong’s first homegrown virtual bank, has publicly launched using cloud-native Temenos Transact to provide a range of next generation digital services for customers to enjoy 24/7 from their mobile phones. Designed, built and launched in less than 10 months, the fully digital bank has seen rapid take up with a reported 10,000 account openings within the first 10 days of launch.
WeLab Bank is powered by cloud agnostic Temenos Transact for core banking along with Temenos Analytics and Financial Crime Mitigation. Implemented on Amazon Web Services and Google Cloud, WeLab is the first multi cloud digital bank in Hong Kong. Operating on multiple clouds at the same time gives WeLab increased operational resilience and disaster recovery capability and is a regulatory requirement of the Hong Kong Monetary Authority for new digital banks. According to the Economist Intelligence Unit 2020 report for Temenos, 81% of global banking executives surveyed believe a multi-cloud strategy will become a regulatory prerequisite.
Developing a cost-effective and scalable core banking solution was paramount for WeLab. Temenos cloud native software is built for the digital age using API-first and DevOps principles and engineered to deploy in containers and microservices. This makes it easy for WeLab to scale for future business growth efficiently and eliminates the need to provision for peak processing volumes so that the bank only pays for its actual usage, yielding significant cost savings.
Critically, with NuoDB the solution delivers a cloud-agnostic, distributed relational database that enables WeLab to deploy an active-active on-demand database across multiple cloud providers with near zero downtime failover.
Temenos Transact is a preconfigured system and so requires very little coding and with Temenos model bank to address local practices and regulations, WeLab was able to bring its service to market faster and extend its innovation with more than 400 out-of-the-box APIs.
With Temenos, WeLab bank is set to transform banking in Hong Kong. In as fast as 5 minutes, customers can remotely open a WeLab Bank account with $0 monthly fees and start enjoying differentiated services such as time deposits with competitive rates, an interest-bearing deposit account with an instant virtual Debit Card, and real-time payments powered by Faster Payment System (FPS). Everything can be done on a mobile phone, simply and effortlessly.
Adrian Tse, CEO at WeLab Bank, commented: “WeLab Bank was born from an initiative to reimagine the banking experience for the 7.5 million people of Hong Kong. From the start, we knew this vision needed the most advanced cloud native technology and a partner that shared our vision for digital transformation. With Temenos we have efficiently built WeLab Bank from scratch, free from any legacies, with innovative features that proactively help customers to take control of their money and their financial journey.”
Max Chuard, Chief Executive Officer, Temenos, said: “Congratulations to WeLab Bank on the launch of their trailblazing new digital bank. Building and launching a licensed bank in such a rapid timeframe is a fantastic achievement and we are proud to have supported them in becoming the first multi-cloud digital bank in Hong Kong. Temenos cloud-native, cloud-agnostic strategy means we can satisfy the needs of the most innovative and ambitious neobanks like WeLab Bank to run on multiple cloud providers. We know this is just the beginning for WeLab and we are excited to be part of their story as they revolutionize banking for people in Hong Kong.”
Bob Walmsley, CEO of NuoDB said: “We are excited to be partnering with Temenos to help WeLab Bank achieve their aggressive launch timelines and deliver innovative banking services to its customers. We were inspired by the technical vision of WeLab and knew that executing an on-demand, multi-cloud strategy was a perfect fit for NuoDB. Our enterprise-class, distributed SQL database combined with Temenos’ cloud-native technology helps banks of all sizes around the globe migrate to the cloud to improve agility and reduce costs.”
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