The Need for Speed
The most interesting banking article your bleary eyed blogger saw over the weekend was one from the Wall Street Journal reporting that the 198 year old Eastern Bank is now promising to approve small business loans in a little as five minutes.
According to the article, the bank has streamlined its loan application from 55 pieces of information to 8. Right now, the program is only open to existing members who have already provided the bank with much of the information it needs. Bank executives admitted that its new approach includes an element of marketing since most applicants don’t need to know if their loan is approved instantaneously. But they point out that it signals to customers that the bank is serious about wanting their business.
To me, this article exemplifies four ways that technological innovation is impacting your credit union.
- In an age when answers are provided at the speed of Siri, members are not only going to judge you on the interest rate of your loans but on how quickly you provide them an answer. And, don’t fool yourself, this is going to be as true about mortgages and consumer loans as it is for small business customers.
- The branch really is dead. If small business owners can get loans in less time than it takes to visit a branch, how often do you think they’re going to be visiting you?
- The line between compliance and IT is continuing to blur. Your compliance is going to be as good as your computer algorithm.
- Your major competitors are no longer just the banks. They are the tech companies that are shaking up lending. Right now, tech companies are introducing new lending platforms to banking. It is only a matter of time before they open up their own banks using this same technology.
Now grab an extra cup of coffee, and have a nice day!