From seamless online shopping to instant food delivery, we’ve come to expect 24/7 digital experiences. Powering these experiences behind the scenes are APIs, specialized software that allows applications to communicate and share data seamlessly.
In the lending industry, API-powered integrations are transforming the way financial institutions operate. By streamlining processes, enhancing customer experiences, and unlocking new opportunities, APIs are driving efficiency and innovation.
In this blog, we’ll explore how API-based platforms can help your lending institution achieve these goals.
How APIs create strong user experiences
With an API-based platform, any experience your institution wants to own or impart can be created and blended into your lending workflow by leveraging the APIs of different providers. With APIs, you can build the experience from the ground up, depending on your goals and user needs. For example, should your institution want to integrate digital lending capabilities directly into its digital banking experience, APIs are available to build a seamless, native user experience user in this way.
The ideal approach is akin to an à la carte menu. Your institution chooses its service providers in any category – be it digital banking, credit bureau, account opening, AML and fraud, customer relationship management system (CRM), core banking etc. – and then plugs it into their systems and gets to market right away, all with a bespoke experience built with the user in mind.
Can institutions easily expand or add new services?
An API-based platform lets your institution easily connect to new products and services – even once the platform is live. Institutions select providers to adapt to their unique needs, users, and customers, giving them unrivaled flexibility and choice over the borrower experience. Expanding this way lets you evolve and scale your business without incurring the future technical debt that often comes from building new, in-house integrations or software.
Already built to work and grow within your full financial ecosystem, API-based platforms are not only less expensive to maintain in the long-term, but facilitate new business growth and opportunities. As you leverage and deploy new and different integrations and partnerships to meet the evolving needs of your staff and members, your institution will expand in more ways than one – customer base, brand value and bottom lines.
How does automation increase efficiency in the lending process?
With integrations, you can choose to automate all or only portions of your lending workflows, such as approval and funding, based on credit-bureau ratings, or other pre-determined factors. And workflows, once streamlined, minimize human error and ultimately drive efficiency.
So rather than relying on staff to, say, evaluate borrower characteristics, your platform rules can automatically determine the best next step of the process. This not only creates a consistent experience regardless of channel, but it frees up staff to focus on building quality customer relationships. When you automate process like this, all core activities still live within the lending workflow, but you both increase the number of lending decisions and strengthen each one.
What does user trust have to do with efficient lending decisions?
Given their everyday reliance on lending technology, users need to trust it will perform at a high level. APIs facilitate reliable connections between your institution and other trusted providers for services such as credit bureau hits, fraud checks, or income verification. And when lenders can complete decisions faster, confidently, and in one workflow, trust in technology is nurtured.
Without this trust, staff lose confidence and become frustrated with the system, reverting to manual checks and old ways of doing business that erode the efficiency and ROI of your lending platform.
Can APIs support cross-sell opportunities and access to new channels?
Pinpointing where new integrations can be developed allows your institution to grow across new channels, opening the way to provide financing to new third-party lenders and expand your customer base simultaneously.
So while direct integration to, say, an insurance carrier (offering mortgage insurance on loans) is now commonplace, direct integration to a mortgage broker or auto dealer network is still not fully explored. Other cross-sell opportunities, for example, could include a direct connection to an auto dealer or mortgage broker network (offering indirect lending). New integrations increase the number of loans you may receive and process without increasing staff.
When embedded in the existing sales and servicing workflow, a robust network of API-enabled integrations reduces friction between sectors and channels, opening up new revenue streams that deliver additional value to both the institution and its members.
API-based platform: The future of lending technology.
Your lending technology is more than a means to process loan applications. It is the engine that runs your business; the gateway your team relies on to add value; and the springboard to new business opportunities.
Given their inherent versatility and power, it is no wonder that API-based platforms are revolutionizing not just industries from within but also the spectrum of user experiences. Enabling connections needed to innovate and scale at speed, secure APIs create the seamless experiences that staff and customers now expect and that are the archetype for the future of lending.