Juan Carlos González
Founder & Partner
Expediente Azul
Startup Contributor

Why Is Financial Placing So Slow?

By Juan Carlos González | Fri, 05/07/2021 - 08:56

More than half of financial company directors and owners of intermediary firms don’t know how much money they are losing by blindly delegating their process of integrating requisites among their executives.

On the other hand, these same leaders question their sales team week after week, why did the signing of the contracts get delayed if they were apparently ready to be signed?

Deloitte confirms that 38 percent of clients of financial services abandon the origination and integration process if they think it is taking too long or if they are asked to share more information than they are willing to provide.

Expediente Azul discovered that 80 percent of successfully-funded projects were all integrated in less than a week. After one week, the probability of being successful drops significantly.

From the prospect’s point of view, poor communication from managing executives make the process of integration very complex since they are the ones in charge of collecting documents and signatures. This is seen as an even harder process than fulfilling the list of requirements.

If you seek to increase financial placing, it is important to understand that each project gets delayed one day at a time.

Once the client accepts an offer, the main reasons for a delay in the signing of a financing contract are:

  • The movement of documents: It is complicated for all participants to know exactly what requirements are missing, which ones they have correct and which ones they must work on.
  • Finding the signers: Many days can go by while trying to gather the people involved in revising, authorizing and signing the documents.
  • “Simplified” checklists: Small print in checklists is occasionally a problem for the prospects, since they are not aware of all the details they need to fulfill until their papers are sent back for corrections.
  • Doubt: When clients have other offers for funding, it is easy for them to compare you with your competition and begin to question which one will suit them better.

Even executives can contribute to the delay of a contract signing due to:

  • Poor organization of their time.
  • Saturation of information (having to look at many loan packages at the same time).
  • Lack of defined and structured processes.
  • Poor understanding/control of technological tools.

Companies contribute to this problem by having:

  • Outdated, imprecise or missing information.
  • A negative attitude when revealing sensitive information.
  • Slow response times.

There are too many things happening in the world around us, and we think that the financial institutions and brokers who will succeed in placing their business as No. 1 are those who have a truly differentiated product and who understand the risks related to each operation, who operate systematically with flawless follow-up and taking full advantage of the expanded intelligence provided by technology.

During 2020, Expediente Azul operated more than 150,000 processes related to onboarding, origination and integration of financial operations. We gave ourselves the task of identifying which assets and good practices that successful institutions had in the past year. They:

  • assured their funding sources.
  • learned how to capture and do customer profiling digitally without losing the human touch that markets in Latin America demand. This is due to their culture and perceived need. (We believe that #SocialSelling practices fulfill this requirement).
  • adapted their supply and capital costs to their prospect’s profile.
  • strengthened their brand’s digital presence.
  • automated their integration and follow-up processes.
  • integrated digital signatures along with identity validation.
  • systematized their commercial executive’s activities.
  • eliminated obstacles in the customer purchase experience.
  • created a support program for clients who looked for resale or avoided bankruptcy and helped them succeed.

ASAFOM has expressed that 2021 is the year in which financial institutions must digitally transform themselves or prepare for bankruptcy. No one has to exhaust their possibilities, since we know that the investment required to start a digitalization strategy is very low, gradual and free of unnecessary pain.

We interviewed 80 directors of brokerage and private financial firms in Latin America and discovered that two incorrect beliefs prevailed in more than half of them:

  • They believe they already have a digitalized and automated business process because they use email, WhatsApp, and Dropbox.
  • They have a wrong perception and think that it is very expensive to move their business process to a digital profiling, integration and analysis platform.

We urge financial institutions in Latin America to approach different groups of experts in digital transformation and challenge them to propose an investment and implementation plan that achieves an agile and concrete return for their business. I can tell you that 33 percent of our clients invest no more than US$60 a month in technology and they can assure you they have had radical improvements in their operation and greater profits in their financial statements.

If you want your digital strategy to be analyzed by us, click here.

I appreciate the contributions and feedback given by the following people:

Photo by:   Juan Carlos González