This year’s Texas Consumer Finance Association Convention (TCFA website: https://tcfa.us/) was another success. I’ve been going to this convention for over ten years now and it’s always good to see current members and new members. As a software vendor, the convention is a good time to hear the issues and success stories talked about by each of the lenders. Having a good understanding of the issues helps us make better decisions on our development plans.

ONLINE LENDING:

1. Website – Having a website where potential customers can reach out to you is the first and most important item. But you will need additional tool sets to actually service the leads that are coming in which I have listed below.
2. ID Verification – Once an application has been submitted the applicant has to be positively identified to be a real person with good intent. There are tools out there to help with this process. It can be as simple as verifying the IP address to the physical address that the application came from. Or it can be as complicated as pulling a credit report and asking credit-related questions. Such as “What is your last payment on your credit card from company A?”
3. Decisioning tools – Once an applicant has been positively identified underwriting has to be done instantly. A pre-approved, approval or denial has to be presented to the online applicant instantly. Hopefully more approvals than denials.
4. Electronic Signature/Debit Card Funding – Now that a loan has been approved, you will need to be able to get a signature on a contract and then fund their bank account via their debit card.
5. Customer Portal – Now that you have a customer on the books, you will need a customer portal for the new customer to login and view their account balance, make payments, and renew their account.

My suggestion is to start off slow. You do not need to automate everything. You can start by just offering online renewal for your current customers or former borrowers only. The majority of our lenders are just offering renewal to current customers or former borrowers.

The major point of this article is that the way of doing business has changed. The new-age customers do not want to come into the office anymore to get a loan. And they are the next wave of opportunity for growth. So be prepared to take on this new opportunity by having the right technology in place to do so.

I mentioned the TFC Safeguards rule early. This is a whole other topic that will be discussed in my next blog. Currently, we are assisting our current customers in getting into compliance by Dec 9, 2022.