Let's Make Providing Financing Easy Again

“A few years ago, I could go to the bank and ask the manager for a loan; after exchanging a few questions, he would stand up and tell the teller: ‘Mrs. Mary, give Juanito MX$50 million.’ When I said goodbye, he would ask me to please come back next week to sign the loan contract." This is what my father told me when I accompanied him to a Comermex bank branch in 1989.

If this was how people used to get a loan, I wonder what happened to us?

I suppose that the value of words, lax regulation and the personal relationship between the banker and his clients made the procedures necessary to approve or reject a loan an almost colloquial matter.

This has changed.

There are now many of us and regulation is becoming more complex as the culture of fraud and money laundering has gained ground.

You can try to cook a frog in two ways: by throwing it into boiling water and wrestling with it to prevent it from jumping back to life; or by simmering it so that it gradually cooks, without it even realizing it. Like the slow-dying frog, finance companies and intermediaries have had to gradually complicate their process: adding more and more requirements, constantly adding steps to their processes and adding robust (and lengthy) controls. As a result, and almost without realizing it, most continue to chase paperwork, collect signatures and follow up in an artisanal way, as if they were still serving a few people with simple requirements.

I would like those in financial services to feel the heat fast and “jump” to adopt the best tools their money can buy; to stop living an anachronistic, linear and painful process for their clients and themselves.

What do I propose to make it easy to provide financing again?

• Profile quickly, accurately and digitally. If you are going to say NO, do it quickly and at the first contact. On the other hand, if it's YES, make it accurate.
• Integrate documents and signatures digitally. Trips to the office? Please. We all have something better to do.
• Provide constant, clear and automatic follow-up to the client, executive, legal and treasury.

• Query digital data sources (credit bureau, legal, blacklists) without disturbing your prospect.
• Automatically extract relevant data from requirements so that your prospect does not have to type it into capture forms.
• Immediately integrate key data into your metrics to eliminate the need for recapture throughout the process. If a red light comes on, put it on the table and decide.

• Surround yourself with tech-savvy lawyers who are not afraid to endorse and, if necessary, litigate. 

• Focus your offering on a specific niche and align your digital process to speak the language of that niche during sale, origination and integration.

• Specialize your financial product so that you can rule on a transaction through case-specific methods and not generic requirements that say little and cost a lot.

• Comply with regulation creatively so that the pain it causes is not perceived by your clients and prospects.

• Invest fearlessly in technology. The fintech megatrend has made available to financial and traditional intermediaries an invaluable arsenal of tools at a very low cost.

• Merge natural intelligence (yours) and artificial intelligence to find past and present behavioral patterns that allow you to make your product, process and service robust.

How would you eat an elephant? In small pieces.

Identify what is the biggest pain that you and your clients have to endure so that they can buy from you (generally, it is the file and its evaluation) and start with the minimum necessary to digitalize the process, automate the follow-up and gradually integrate the technology that will allow you to scale, focus and reduce your risk.

There is an underserved market that is waiting for you, complaining or ignoring you. Shall we go for it, or do you prefer to cook gradually in the comfort of your slow boil?