Community banks and lenders are more essential than ever, but COVID-19 has caused many institutions to make significant adjustments. Keeping bank doors open is critical for the many small and medium businesses that are seeking funding to cover operational costs, pay employees, and account for revenue losses during this time. Banks are stretched to meet loan demands with limited hours, limited staff, and little to no customer interaction.
Your organization’s success in weathering the pandemic (and in turn, your local community) depends on how well you adapt. With limited lobby hours, you need to ensure there’s a channel to serve your business customers. Below, learn how you can crisis-proof your institution and serve more businesses with fluidity and ease.
Digital is king: Bringing operations online
Historically, face-to-face interactions have been the cornerstone of community banks. But when that opportunity is suddenly taken away, how can you quickly fulfill customer needs and provide a personal touch? The answer lies in digital lending.
While FinTech has already infiltrated the consumer sector, many business lending services are still using obsolete technology—or no technology at all. In the era of social distancing, the ability for business owners to come into their local bank branch virtually disappears. At the same time, a bank’s lending teams may be severely understaffed as employees take sick leave, care for family members, or refrain from taking mass transit.
Software never calls out sick. A strong digital infrastructure can handle all of your existing services—and also open the door to new streams of revenue you don’t typically get from on-premise interactions. In effect, digital increases your reach.
That’s not to say digitization replaces employees. In fact, some banks have seen increases in productivity after implementing automation. Digitization not only supplements staff during times of crisis, but it also alleviates burdensome manual processes from your team as well and frees up commercial lenders to work the larger, higher-margin deals.
By offering continuous and uninterrupted lending services, your institution can be a beacon to small business customers who rely on your loans to keep their finances intact.
Untapped potential: Creating accessibility in lending
Bringing your lending online is just one piece of the puzzle. Traditionally, business loan origination, underwriting, and other processes are done manually. In fact, only 23% of large banks and 11% of small banks offer digital small business loan applications. In the current climate, when small businesses need aid fast, digital channels connect them with the capital to sustain their operations.
Using small business lending software can help you serve these in-need customers quickly, remotely, and fairly—with criteria that actually reflects their credit worthiness (such as real-time cash flow).
In the post-COVID-19 lending environment, small business owners are more challenged than ever before to visit a bank’s physical location. By digitizing and offering an accessible platform for small businesses to seek funding, community banks are sending a message that they’re invested in the success of all customers.
