With the first half of 2019 (and decades before that) under our belt, we continue to take a look at what is working in fintech, and where things are headed next. Focus areas like customer experience, design, and information security continue to be important for leaders in the lending space, while the importance of partnerships and customization emerge to make major differences for lenders in a positive way. FNI and our partners have weighed in to give a current and future look at 10 critical trends in fintech. Read the first five from our experts here, and sign up below to receive part II.
1. Convenience and customer experience. The two c’s in success.
It’s no secret in any industry that consumers and borrowers are becoming more educated in every aspect of the buying process every day. With unlimited information at our fingertips, the importance of providing a seamless experience is more important than ever before. This customer focus includes everything from the interface design of a credit application (we’ll talk more about this later) to speed of decision, and many things in between. Lenders who go the extra step to ensure a seamless customer-centric experience will stand apart from sales-centric organizations.
“A growing base of consumers, driven largely by a generational shift, are prioritizing convenience and experience above price. Ultimately a focus on customer experience and customer choice, are growing drivers of success.” – Nicholas Payne, CTO
2. No two lenders or borrowers are alike. Product personalization is key.
Business objectives for lenders are adaptive just like the lifestyles and requirements of borrowers. Whether building a software platform or an internal process, modularity is the way to go for lending organizations that will continue to stay competitive. In software, modules allow for ease of customization through the application process. For example, adding in sections for certain borrowing experiences and pulling them out for others can provide an experience that is seemingly customized for each borrower. In business processes, thinking about handling challenges in simple, adaptable chunks ensures that objectives are clear and goals are met.
“Lenders should be focused on developing flexible, scalable, platforms with just the right amount of customization. We’ve found that an out-of-the-box system typically accounts for 90% of lenders needs. That final 10% gets them and their borrowers into the golden zone of experience and customization.” – David Williams, Sales Engineer
3. Smart leaders ask for help. Smart business create partnerships.
In home construction, there are a number of key players that are all integral in making the project go well. Contractors partner with painters, carpenters, and sometimes even specific experts in drywall and concrete if the project calls for it. Making some parallels with the financial sector, smart lenders and software developers focus on what they’re best at. Do you have a solid decisioning strategy but need help implementing it? Do you have a strong platform but need help in accessing consumer data from leading bureaus? That’s where partnerships come in. Seeking out the best team to supplement your already-solid product makes for constructive insight, helpful perspective, and objective point of view.
“Partnership is alive and well. An advanced solution doesn’t remove the human component. Successful lenders are increasingly aware that post-implementation support and expertise are critical.” – Pat Sabisch, Program Manager Director
4. Be there or be square. Situational lending for personal borrowers.
Historically, many have thought of financing as a large-transaction tool. Buying a home? Get a mortgage. Grabbing that dream car? Car payment, here I come. These transactions are still leading in the finance industry, but more and more consumers are seeing value in financing small projects or purchases. Small DIY project at home? Oh, look. There are financing options. Buying that trendy new mattress online? Simple payment plans abound. The lending sector is learning to be there at critical points where borrowers are clicking that “buy” button for medium and large purchases.
“Strong consumer interest in personal loans has prompted banks and credit unions to revisit their own offerings, leading to more innovation and choice for borrowers from all risk tiers.” – Jason Laky, Senior VP, Transunion, an FNI Integration Partner
5. Layered security. Low business risk, evolved consumer requirements.
While security in fintech is no-more a trend than slam dunks in the NBA, the approach to security in the financial sector is ever-evolving. Today is more like three-sixty-behind-the-back slam dunks at the NBA all-star game. Pretty complicated, but beautiful when well-executed. Layered security (or, layered defense) is about being proactive, ready for—not if—but when any number of systemic attacks will occur. Multiple layers ensure that if one portion of the system breaks down, there are many more in place to protect critical consumer and business data. Lenders that prepare for and learn from attacks know that multiple security layers are an important part of any platform.
“As the trends and drivers for Fintech are evolving, so must the ability to be able to deliver solutions to customers quickly and efficiently while keeping layered security at the forefront of design and keeping business risk at acceptable levels. FNI delivers a layered security approach with its solutions that keep risk proportionate with the evolution of customer requirements” – Mark Eichholz, CIO
The FNI Blueprint Loan Origination Software platform represents more than three decades of leading the industry in flexibility, speed, and service. Our team stays at and leads the forefront of the fintech market by pursuing daily continuing education and attending monthly and quarterly conferences and seminars.