Consumers don’t expect transactions or payments anymore; they expect experiences. In many ways, the small-business lending industry has some catching up to do.
With the emergence of online and
As more national banks leave smaller communities and focus on large customers, fintechs are creating an "Uber effect" with an easier experience. Small businesses are increasingly looking to borrow money and fund their growth initiatives, and need a partner who can deliver.
The traditional banking process is slow. For small businesses looking to borrow much-needed capital, the traditional lending process takes up to about 18 weeks and can cost a bank roughly $10,000 in direct and indirect costs.
This time and money are usually spent finding and validating a business opportunity, evaluating the business, ensuring financial capacity, creating terms and conditions, and analyzing pricing and cross-sell strategies — much of this process still relying on manila folders, spreadsheets and the passing of paper around an office.
Moving forward, banks can make a bigger impact by leveraging technology that reinvents manual loan approval processes with relevant, timely and secure credit assessments.
Banks can also mitigate risk while elevating their brand to attract and retain new customers — opening the door to new market opportunities. Technology is changing how banks lend as they strive to exceed customer expectations in a fast-paced, constantly evolving environment. Banks that take a critical assessment of their operational practices and Uberize their offering will gain a competitive advantage.
Digital disruption has changed the way we do almost everything — including how we share and spend money, how we get from one place to another and how we interact with friends and colleagues in faraway places. Technology has also changed not only our physical and immediate experiences, but our expectations as well.
