Next-Level Lending:
Maximising convenience with personal loan applications for today's borrowers
Part 3: Mobile Optimisation
November, 2023
Author: George Kelly, Consultant & Digital Transformation Specialist
The personal loan landscape is often falling behind other products when it comes to the in-app mobile customer journey. For the loan application, most banking apps now lead customers to a mobile web page, and some of the less developed personal loan markets have far too many incumbent players requiring customers to visit a branch for identity verification. This leaves a large opportunity gap, and according to Experian, most consumers now prefer to use digital banking options rather than visiting a branch (1). Only a limited number of lenders, such as Monzo in the UK, are leading the way in allowing the customer to complete a loan application fully in-app.
Further, the in-app customer journey can be enhanced beyond the loan application process. It is becoming more common for pioneering lenders to offer an increasingly complex product, with features such as the ability to top-up a loan mid-term or make additional repayments at any time with no charges, thereby shortening the loan term or reducing regular repayments. However, when it comes to making use of these features, customers are too often required to log in to their online account on a web browser or call or email customer services. This can be both labour some for the customer and costly to the lender.
To optimise the mobile experience, and keep up with the market's innovators, as a lender, you can consider implementing the following into your product offering:
1) Develop the ability for customers to apply for a personal loan within their existing banking application. In 2024, mobile banking users are predicted to make up over 50% of the UK population for the first time (2). This presents a unique opportunity for institutions to convert existing current account customers into personal loan customers, by giving them the opportunity to apply via a channel that is familiar and increasingly popular.
2) Give customers in-app access to product management features, enhancing loan management flexibility. As the personal lending market develops and personal loan products become increasingly flexible, it is necessary for product management tools to keep up. Convenience and user experience are important for customers, and providing the ability to be just a few taps away from customising and managing their loan options directly in-app can make the solution more user friendly. It can also be beneficial from a product and a revenue generating perspective for a lender to offer their customer the ability to easily extend their loan term or increase their loan amount in-app.
3) Give clients ability to contact customer services using a chat feature. Offering real-time problem resolution tools and advice with an in-app chat feature can go a long way in improving user experience and customer loyalty. This can be particularly useful for customers at risk of defaulting on their loan – offering advice and solutions which are as accessible as possible may reduce the risk of falling behind on repayments. Additionally, offering real-time conversation functionality in-app can help save costs for a lender, re-routing a significant number of requests away from the telephone channel into the instant chat solution.
The ability to apply for a loan and make use of new product features, including requesting payment holidays and changing repayment periods, all within a mobile application, can help meet customer expectations around mobile convenience and give them more control over their finances. This can improve overall product satisfaction, increasing customer loyalty and retention.