If you are an online lender you should know that studies show modern borrowers are now expecting to be able to to get a loan from their mobile phone. Mobile lending has become the method of choice for many young, affluent customers—the very people who will soon be the backbone of your online lending portfolio. *A 2015 Federal Reserve study found that 38 percent of all bank customers, a calculation that includes those without a cell phone, used mobile phones to at least get information about their accounts. By 2018 that number had grown to surpass 50 percent.
It’s not hard to imagine some of the primary reasons people might switch banks. One of the first that comes to mind is moving to find better interest rates and lower fees. But an almost equally compelling reason for many age groups is to get a better digital experience. Forty-seven percent of customers aged 25 to 34 reported they would switch for online/mobile services, compared with 54 percent for lower fees and rates. This is an extremely narrow gap that demands immediate attention.
The trend toward mobile lending is actually good news for forward-thinking online lenders because as this article from The Financial Brand states, “most banks and credit unions digital efforts come up short.” By being proactive and providing mobile lending, you will be the first choice of borrowers rather than a stuffy, slow, behind the times brick and mortar banking establishment.
For the second consecutive year, global research on the state of digital lending was conducted by the Digital Banking Report. In 2018, they found that organizations were just beginning to embrace the need for online and mobile lending solutions. What they found was that while there was significant growth in the number of organizations offering online and mobile lending functionality, most of the offerings are substandard compared to online lending alternatives. In other words, banks and credit unions are creating digital lending options that are slower and have more friction than the competition.
So as you can see, by being an online lender who offers mobile lending you are far ahead of the competition. However, there are pitfalls to be aware of before you launch your mobile lending platform. This article from CUInsight is written with credit unions in mind, but everything it says also applies to other types of online lenders. The article is titled How to Fail at Mobile Lending Without Even Trying. The Rules of Thumb blog from MoneyThumb suggest you read that article before launching your mobile lending option.
We hope the above information has helped you better understand mobile lending and prompted you to begin offering this option to borrowers. Another way to stay ahead of other online lenders is by using the best PDF financial file converters on the market. MoneyThumb has a version of our this tool specifically designed for lenders. This will allow you quickly and easily convert borrowers financial information so that you can make faster, better-informed lending decisions.