Making Applications Processes Customer Friendly - Part 2

Most customers find applying for credit difficult and confusing. Institutions are often accused of requesting too much information for a ‘simple answer’. Application forms are often full of ambiguous and unnecessary information. Customers also complain that after enduring the trials of applying that they often get declined without an adequate reason.

Asset-based products have the worst reputation for confusing application processes. This series of tips will explain how you can make your asset based applications processes less onerous for you and your customers. The adoption of three key principles can lead to increased sales as well as lower process costs.

Last month’s tip discussed how separating the process into appropriate stages can improve the customer experience. This tip deals with the second principle.

Principle 2 – use each stage to prepare the customer for the next stage

Customers are often left feeling frustrated when they are involved in a multistage process of applying for credit. This is due to the delays incurred as customers are not advised of the supporting documentation required to complete the questionnaire at the beginning of the application process.

Banks place too much reliance on their sales team to explain to customers what is required and assume that their customers will remember or understand what they have been told. Customers who are self employed, non-citizens of the country or are paid weekly instead of monthly often struggle in the process as the supporting documentation required from them may be different.

Once the applications process has been separated into customer friendly steps, each of these steps should be designed with a view to preparing the customer for the next stage.

One way of doing so is preparing a certificate for the customer which re-iterates all the information that they have provided, the amount and terms the institution is willing to grant them and a set of instructions as to what is required should they wish to take the deal further.

These further requirements could include an offer to purchase and proof of income, employment and/or identity. Most institutions have different business rules based on the customer’s employment and residential status. The certificate created should dynamically recognise these and ensure that the customer is given the correct information as to what supporting documentation is required to move to the next stage.

The requirements should be clear and simple and should always include a phone number, should customers require further assistance.

Next month’s tip will explain how to improve the customer experience and reduce processing costs even further through the effective use of technology and customer channels.

Paul Shortridge is a Senior Consultant at PIC Solutions, the largest customer management solutions company based in the Southern Hemisphere. He has over 5 years experience in the financial services industry. Previously with Nedcor as manager – innovation in retail credit, he headed up a team that successfully rolled out projects to reduce risk, increase revenue and reduce costs across all credit and transactional products. In this role, he implemented initiatives that increased revenue by R100 million and introduced their 8-second home loan pre-approval process. As lead consultant at London Bridge Group, Paul was responsible for the business lead in large scale project implementations as well as assisting the sales team with expanding their market in South Africa. He holds a BSc and MSc in Chemical Engineering from the University of Cape Town.