How to Digitize Credit Processes in Corporate and Retail Banking in 3 Months

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Sebastian Grzelak

Mar 25, 2024 • 8 min read
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If you can digitize credit processes in just three months, why do banks still hesitate?

When it comes to attracting and maintaining strong relationships with customers in the age of digital acceleration, banks have been lagging. They must keep their eyes on the ball when it comes to their profitability and relevance. Digital credit processes can do so by allowing banks to offer a wider range of financial and non-financial services, as well as by drastically speeding up loan operations.

The market has already shown the prevalence of this. SMEs have started to invest more since the start of the decade, and 66% want access to faster credit. When banks neglect to provide this, then businesses turn to FinTech.

Moreover, the digital lending platform market size is expected to exponentially grow by 2028 with a compound annual growth rate (CAGR) of 21.9%.

We can see nearly three-quarters of financial institutions using digital channels to serve both new and existing clients. More than 70% of them have implemented or are implementing digital loan origination for personal loans, 73% can electronically prepare loan documents, and another 73% have invested in eContracting/eClosing technologies.

If this is not enough to bring the point across, let's look at the client side.

Millennials are the customer group driving the change in the sector. With this generation emerging as the primary driver of new loans, banks should be already convinced to adopt a digital-first approach. In 2020, this segment already comprised more than 50% of the individuals using banking services, and digital banking has become the preferred mode.

Customer demand is reshaping with an emphasis on speed and convenience.

Disruptive technologies are leading the industry, providing flexible, open, real-time, and easily integrable solutions.

The competitive environment has expanded, offering small businesses a plethora of credit options from FinTech to BigTech companies, as well as specialized SME niche lenders.

Although traditional banks remain prevalent, 63% of SMEs still favor them for their financial needs. There is still a notable uptick in the utilization of competitors, as evidenced by 56% of SMEs employing banking and payments FinTech services.

These trends are occurring against a backdrop of decreasing revenues and operating margins, indicating that banks must prioritize the generation of new revenue streams to remain competitive.

Early adopters of digital credit processes are, and will be, the ones to capitalize on this shift.

As Yannick Grecourt, EY Belgium Financial Services Country Leader, said:

Lending is a critical aspect of any bank’s business. Remaining relevant will necessarily involve bringing this part of their business into the future.

Yes, digital lending will enable them to meet their customers’ desire for faster responses and faster access to funding. But what’s more, automation and data analytics will play a key role in offering increasingly personalized customer journeys.”

All in all, banks that embrace digital credit processes have seen significant reductions in operational expenses, enhanced customer responsiveness and satisfaction, and decreased risk. These benefits are achievable within timelines and budgets that were previously unthinkable.

However, in Poland and Germany, just a few banks are implementing digital credit processes, less than 50% in the former and only major banks in the latter.

What we know about digitizing credit processes

At Netguru we have worked with five clients to digitize their credit processes. Our efforts yielded tangible results, ranging from streamlined processes to enhanced security and scalability – implementing it all in less than three months.

One such project involved partnering with a SaaS solution provider to develop a fully digitized credit process, leveraging blockchain and open banking technologies. We successfully onboarded within five days, increased process efficiency by 70%, as well as received a mobile functionality and user experience score of 90%.

In another project, we collaborated with a leading export finance platform to simplify communication and streamline export transactions through the implementation of digitalization. This initiative garnered a Net Promoter Score (NPS) of 10, highlighting the success of the project in meeting user needs and enhancing their operational efficiency.

We also worked closely with industry associations and financial service providers to digitize inquiry, guarantee processes, and facilitate seamless integration with external platforms.

In order to enhance regulatory compliance we implemented KYC tools, since Identifying and legitimizing a person is critical in terms of anti-money laundering. For instance we have integrated an automated identity verification from IDNow which allows real-time confirmation of the existence of a legitimate identity in an intuitive and frictionless way.

All these collaborations underscore the success that digitizing processes and overcoming traditional barriers can provide, resulting in tangible improvements in accessibility, usability, and customer trust.

Thanks to these projects, we found out the key steps to take to ensure a successful digitalization of credit processes.

The 8 steps for successfully digitizing credit processes in corporate and retail banking

  1. Digitisation of Key Credit Process Areas: Identify and list down the key areas of the credit process such as loan origination, underwriting, decision-making, and servicing that can be digitized.
  2. Evaluation of Existing Technology Infrastructure: Conduct a thorough evaluation of the bank's current technology infrastructure. Identify any gaps or limitations that need to be addressed to support the digitization of the credit process.
  3. Defining Roles and Responsibilities: Clearly define the roles and responsibilities of all bank employees who will be involved in the digitized credit process. This should include not only those directly involved in the credit process but also IT staff and other support personnel.
  4. Implementation of the Solution: Once the roles have been defined and the necessary technology infrastructure is in place, proceed with the implementation of the digital credit platform.
  5. Training of Employees: Organize training sessions to familiarize employees with the new digital credit platform. The training should cover the new processes that will be implemented as part of digitization.
  6. Risk Management Strategy Development: Develop a comprehensive risk management strategy to protect the bank from potential risks associated with the digitized credit process. This should include measures to mitigate risks related to data security and privacy.
  7. Testing of the New Digitised Process: Before rolling out the digitized credit process to customers, conduct thorough testing in a controlled environment. This will help identify and rectify any issues or bugs in the system.
  8. Monitoring and Measuring Performance: Once the digitized credit process is live, continuously monitor and measure its performance. Make necessary adjustments based on feedback and data to improve efficiency and customer satisfaction.

Where to go from here?

Embracing digital acceleration by digitizing credit processes offers numerous advantages, including lower costs, automation of systems, as well as expansion to new sales channels.

Opportunities to break into this untapped market are still available, particularly in regions like Poland and Germany, where digital credit processes are still emerging.

At Netguru, we've spearheaded successful digitization efforts for various clients, yielding tangible results in streamlining processes, enhancing security, and fostering scalability.

If you want to have your processes digitized and automized by next quarter to gain new sales channels and lower your costs, reach out to us.


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Sebastian Grzelak

Sebastian has always been an IT geek. He built his first website in 1999, as soon as he got his...
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