Cracking the Code on Lending Through DX


Digital Transformation is about real-time connection. It’s about connecting the customer to an answer, a decision, a product or service, or information, when and where they want it. Numerous companies offer back-end systems and applications that claim to provide this connection. But in most cases, the solution comes in a box of defined, limited functionality that defines how the interaction will go, creating institutional barriers the customer has to navigate through — rather than an agile system that responds to the customer. DBS wanted to embark on digital transformation for lending, but we didn’t want to be trapped in any of these little boxes. So we built our own system.

It took us five weeks.

We wanted to compete with the fin-techs — with their ability to draw on existing data rather than ask customers to answer a ton of questions. We wanted to be able to provide an instant loan decision, rather than asking customers to wait for an email or a call. In short, we wanted to create a seamless, fast, easy interface that would match the kinds of transactions customers are used to from other types of apps. But we also wanted to make it possible for the member and employee to engage in real-time in one place, rather than building yet another add-on CRM system that didn’t connect in real-time.

We had one big strategic advantage that few financial institutions can claim: a talented tech team who understands financial services, whose skills were up to the task, and who absolutely thrive on big challenges. These are people who, if you want to really light a fire under them, you tell them something’s impossible. In a risk-averse industry whose mantra tends to be “Protect the institution first,” this kind of supercharged, innovative team is a rarity. Before any company can build a system like we built, they need a culture that will attract and support this kind of team.

The first step had to be creating a proper digital foundation. Working with typical legacy banking systems, DBS built out two proofs of concept with two different applications.

“We needed to create a real time integration layer that could transform what the legacy system couldn’t do for us,” said DBS Chief Technology Officer Jaya Rohit. “We used a cloud engagement layer to quickly launch the product. But getting it to work seamlessly with the existing technology required tons of coding. We started with auto lending with the intention of adding other products as time went on. They asked our team to do it in four weeks, we countered with five, and we were off.”

The result? Almost immediately, auto loans increased by more than 200 applications a week. For months, the credit union had been trying to get back to post core conversion auto lending production. DBS launched the new process in phases over two weeks, and by the second week the goal was more than surpassed.

Could your institution do the same?

There’s no doubt, having a team that was willing to invest in the proper tech stack was the most important factor in our success. Without that team, we would have had to buy a much more limited system. But other organizations may not be sure what the best strategy is for them. If that’s your institution’s situation, consider these factors:

Are you ready for this as an organization?

Bottom line, if you have a rigid process in place for getting things done, and if you have a risk-averse, conservative culture, you’re going to have a hard time breaking out of thinking of the institution first and customer second. You also will struggle if you don’t have a culture that works across departments and branches and incorporates everyone. Every single employee in the credit union or bank has a stake in lending and silos will make any new lending system clunky. Putting the customer first means a lot of change and investing in technology that may or may not work out as you hope. You need a culture that can work together and tackle that risk, fail fast, and move forward.

Build or Buy?

This is a straight-up talent question. If you don’t have the people who love to take on big challenges and troubleshoot, test, and code until they work out all the bugs, you might be better off getting a system off the shelf. The common myth is that buying means a lot faster deployment anyway, but that isn’t necessarily the case if you have the right talent in place.

Does your institution leverage credit report data for marketing purposes?

The data your bank or credit union collects during the loan application process is a rich source of opportunity for deepening customer/member relationships - even if that loan never funds. From what we learn about the customer, we can build a marketing journeys that will ensure we provide useful information for their financial health and wellbeing where and when they’re likely to need it.

Do you leverage your lending applications for next best product? 

Maybe the loan application didn’t result in a car loan. But the data might show that the customer needs to build credit, and that a secured card would help. Or possibly they live in an apartment and might be ready to think about a home. Or maybe they’re savers and could use a CD.

Lending is the lifeblood of any financial institution. While it’s not the easiest or quickest place to start a digital transformation, it’s unquestionably one of the most impactful places to invest in DX. At DBS, we’ve found that focusing on improving the customer experience has a huge impact on production too.