You may not realize it, but the same technology that’s disrupting retail banking is also reshaping commercial and corporate lending.
As consumers embrace the social and mobile lifestyle, it’s no surprise to see the emergence of fintech lenders in the small to medium end of the commercial lending market. These companies offer a purely digital channel – they don’t have branches. A business can apply for a loan online, get an answer within minutes and even get access to funds the same day. The turnaround time is significantly faster than what it was five or 10 years ago, when it took weeks or months to get access to funds.
Corporate lending is a little different because the disruptors aren’t playing in that space – right now. But, increasingly, corporate customers have similar expectations. A lender could say, “You’re a large corporation, you should expect to wait much longer for an answer or for access to funds.” That won’t fly. Corporate customers expect access to their bank and services through alternative channels. Banks need to respond quickly and efficiently or face the potential of loss of market share.
How? Well, in some regards, they’re not trying to be a fintech; they still expect to support a branch network, for instance. But they recognize that they need to offer alternative channels to access the banks services. So, they are starting to think from an outside-in perspective about how they deploy technology and their business process from a customer’s point of view. They’re broadening the services they offer through digital channels and increasing automation to meet customer expectations about access and response times.
Leading banks recognize investment in technology is no longer simply about satisfying regulatory requirements. It’s about delivering an improved customer experience. And banks will have to take a more aggressive view of digitizing their lending process if they want to retain or attract customers.