Regardless of whether you are a product- or relationship-oriented SME lender (read our earlier post), data is essential for growth. True, the notion that “Data is King” is old news – every financial institution recognizes the importance of data and the power it has to transform their business.
The challenge is that with so much data available, it can be difficult to determine a clear strategy, such as what specific data sets should be used and what impact the implementation of new, data-centric processes will have on business.
The solution is to digitize the data.
Today, SME borrowers not only expect digital processes, they trust them. The benefits of digitization are significant for both the lender and its customers and it can positively impact many areas.
Cross-Selling Relevant Products and Services
When a lender understands its clients and prospects better, it can tailor services and offers that are more relevant and that best suit their needs. Lenders are more successful in offering appropriate products, and they can do so with a more proactive approach rather than waiting for that customer to ask about services they want; or even worse, going to a competitive bank.
Improved & More Cost-effective Processes
Automating data access means cheaper and more efficient processes for lenders. It also means simple, streamlined and fast processes for customers – a win-win that reduces costs and improves customer service and satisfaction.
Precise Risk Evaluation
By better understanding customers, lenders have a better handle on the risk of that customer that is significantly more precise. As a result, lenders increase healthy sales, reduce losses as well as reduce the capital needed to manage potential loss.
Fully understanding customers and how they compare to their peers provides an opportunity for a more strategic, value-added relationship that gives lenders a competitive edge. This not only helps reduce attrition, but it also supports increased cross-sell opportunities.
To learn more about the key challenges lenders face on their digitization journey, download our latest whitepaper.