10 Ways AI Can Disrupt Consumer Lending
Artificial Intelligence (AI) and Machine Learning (ML) are having a significant influence on industries. From robotic process automation and speech recognition to virtual agents and driverless cars, the extent of its impact has moved us from a mobile-first world to AI first. In a recent study of digital executives, the majority, 31%, said, virtual personal assistants following Automated data analysts (29%), automated communications like e-mails and chatbots (28%), automated research reports and information aggregation (26%), and automated operational and efficiency analysts (26%) rounded out the top five. Business leaders said they believe AI is going to be fundamental in the future. In fact, 72% termed it a significant ‘business advantage.’ AI enables enterprises to unleash the trapped value in their core businesses. Machine-based neural networks can comprehend a billion pieces of data in seconds, placing the ideal solution at a decision maker’s fingertips. Your data is constantly being updated, which indicates your ML models will be revised too. Your enterprise will always have access to the latest information, including breaking insights that can be applied to rapidly changing business requirements. No doubt, many FinTech companies have cut down the costs of credit underwriting to find the right customer through Machine Learning applications. How can AI help Consumer Lending? Consumer Lending (CL) of all kinds, such as mortgages, autos, credit cards, student loans, etc., is a data-rich environment. We can say, at its core, lending is undeniably all about ‘big data’. For example, in a typical mortgage lending scenario, we estimate that between the borrower’s credit history, property, employment, income, tax, and insurance information, more than five thousand data attributes are captured during the lending process. This is a time-consuming and expensive process and in case of many lenders, an extremely manual and cumbersome process. And it is difficult to predict how much of this data is even relevant? How much of it is useful in forecasting borrower behavior during the application processing, closing, post funding and servicing stages? By leveraging more data and analyzing customer default probability, the credit scoring systems can predict behavior, thereby helping lenders come to a more conclusive decision based on data. Fintech organizations need to drill into the insights to grow their business, manage risk, and capture more market share in the competitive consumer lending landscape. 10 ways AI can impact the Consumer Lending industry Below are just some of the ways that this technology is taking the consumer lending industry by storm. Lower underwriting and origination costs by machine Reduced credit losses Fewer Losses from fraud Decreased agency recourse risk Better risk-adjusted margins Less servicing costs Reduced Write-offs Greater Customer Satisfaction Higher origination revenue Lower due-diligence cost The Road Ahead It is apparent that AI and ML are the future of consumer lending. Digital Transformation is drastically impacting the mortgage process, and it is imperative for lenders to stay updated with these changes and adopt them proactively. Technology is no more a roadblock and today’s customers are very receptive to digitalization efforts. Consumers no longer want the same old experience; they want convenient, secure solutions that meet their lending needs. It is therefore crucial for the lender to create digital mortgage experience that goes beyond an online application to offer a data-driven digital process through AI-powered automation. AI and Machine Learning have enabled key players across the consumer lending landscape to transform, both regarding their back and front-end processes dramatically. From cost reduction to streamlined operations to increased efficiency, both AI and Machine Learning will continue to pave the way for the consumer lending industry. The promise of AI has always been to make lives better and to enhance the way we work. AI can reverse the cycle of low profitability through intelligent automation and innovation diffusion. Advancements in ubiquitous computing, advanced algorithms, low-cost cloud services, analytics and other next-gen technologies are now allowing AI to flourish. However, AI’s full potential will never be realized until organizations take more risks and begin to experiment with AI technologies more aggressively Later this month, we will be releasing our white paper on “Reshaping Artificial Intelligence with Consumer Lending.” FAQs – Tavant Solutions How does Tavant implement AI to revolutionize consumer lending processes? Tavant leverages advanced AI technologies including machine learning algorithms, natural language processing, and predictive analytics to automate loan underwriting, enhance risk assessment, and streamline the entire lending workflow. Their AI-driven platform reduces processing time by up to 80% while improving decision accuracy and customer experience. What AI-powered lending solutions does Tavant offer to financial institutions? Tavant provides comprehensive AI-enabled lending platforms including automated credit scoring, real-time fraud detection, intelligent document processing, and personalized loan recommendations. Their solutions integrate seamlessly with existing banking systems to deliver end-to-end digital lending transformation. What are the main benefits of AI in consumer lending?AI in consumer lending offers faster loan approvals (often within minutes), more accurate risk assessment, reduced operational costs, improved fraud detection, and enhanced customer experience through 24/7 availability and personalized service. How does artificial intelligence improve loan approval processes?AI improves loan approval by analyzing vast amounts of data in real-time, automating credit decisions, reducing human bias, and providing consistent risk evaluation. This results in faster processing times and more accurate lending decisions. What challenges do lenders face when implementing AI technology?Key challenges include data quality and integration issues, regulatory compliance requirements, initial implementation costs, staff training needs, and ensuring AI models remain fair and unbiased across different customer segments.
Blockchain – A Boon to Consumer Lending
Blockchain: The Next Fintech Wave for Digital Lending While blockchain has attracted world’s attention because of its association with Bitcoin, it is now being seen as a viable technology for the financial services industry. According to a report by Santander, by 2022, blockchain technology is poised to save banks $20 billion a year in infrastructure costs. Recently, McKinsey published a blockchain technology report where the firm analyzed how the technology is disrupting a range of industries, emphasizing financial services organizations and forecasted commercial deployment of blockchain technology at scale by the year 2021. Furthermore, a report by IDC indicates that the year 2018 will be a crucial stage for financial services organizations as they would consider making a giant leap from proof-of-concept projects to full blockchain deployments. But, why Consumer Lending firms are still reluctant to adopt the Blockchain technology? Despite the seemingly profuse growth of bitcoin and other blockchain technologies, key industry players still appear to be averse to embracing this technology. Because currently there is no legal or regulatory framework for blockchain applications, which also reveals that smart contracts are not yet legally binding. Furthermore, data privacy also becomes an impediment to blockchain adoption as all distributed ledgers need to adhere to each jurisdiction’s data privacy laws, which can be tricky for publicly-viewable ledgers. The cost of storage on Blockchain Database– Though the blockchain technology adoption promises many long-term benefits regarding productivity, efficiency and costs, it is extremely expensive to initially put it in place. The software that is required to run blockchain technology in enterprises must be explicitly developed for the specific firm and is therefore costly to purchase, acquire or develop in-house. Consolidating with Legacy Systems- An organization must either revamp their legacy system altogether or seek a way to integrate their existing system with the blockchain solution to make a move to a blockchain-based system. Energy Consumption- The Bitcoin network as well as the Ethereum network, both consume the proof-of-work mechanism to validate transactions made on the blockchains. The entire mechanism requires the computation of complex mathematical problems to verify and process transactions and to secure the network. These calculations require a significant amount of energy to power the computers solving the problems. In addition to the energy used to run the computers, a sizable amount of energy is also needed to cool down the computers. Benefits of the Blockchain Technology in Consumer Lending Blockchain lends itself to some of the common use cases including regulatory compliance, settlements, cross-border payments, custody, asset tracking, trade finance and post-transaction settlements within the financial sector. Many financial organizations have already initiated projects based on blockchain technology for payments and securities trading and spending on blockchain technology to transform existing cumbersome and inefficient processes such as cross-border payments, provenance, and post-transaction settlements. These are crucial pain points for many financial services organizations, and thus blockchain offers an attractive value proposition, Amongst this, consumer lending is an important genre where blockchain acts as a key value driver—but how blockchain technology can help the Consumer Lending industry? A few benefits to consider: 1. Identity Authentication Blockchain networks build a robust system of member identification. This can considerably boost the processing times for stakeholder communication. For example, a single borrower can create a digital ID that contains all their information in one place. This includes information about their mortgage history, outstanding balances, credit score, and income, etc. When applying for a home mortgage from different banks, this unique ID can be used at multiple lenders and even for cross-checking with credit agencies and employment verification. 2. Transparency for Lenders In a digital world, where lending and borrowing happens on the blockchain, time and resource-taxing business rules and processes are taken care of by algorithms. Reconciliation no longer exists, because the data is authentic and the need for trust is virtually wiped out. The security is no longer in question, as key facts and changes are transparent and this creates a lot of transparency for the lenders. They can find out the transaction history for an applicant from the initial submission to actual fulfillment of the loan. 3. Improved Servicing Efficiency of Loans Loan servicing businesses face data management challenges during loan collection and transfer processes. Blockchain technology could help make the process more efficient and streamlined. It is even possible to eliminate the entire servicing industry and replace it with a blockchain. In case of changes in the regulatory rules, blockchain can be adjusted to the new legislation more easily compared to the existing model where each firm is open to a different interpretation of the new government policy. 4. A single version of the truth Moving to a single and shared view of the truth will allow each party in the value chain to remove duplicative processes and save money and time. This approach could also be used in the front-end processes to bring in third-party identity providers and other information providers, who can help to counter fraud and AML risks while making the process easier for customers and sales associates. 5. Empowered users and increased security Disintermediation takes off both the risk and expense of counterparties and enables more empowerment for users to control their information. Blockchain also enhances the sharing of common data by resolving data inconsistency problems that occur during servicing transfers. Exchanging data through blockchain makes the system more cooperative and adds security. 6. Streamlined Operations and Enhanced CX Faster and smooth processing for swift banking experience and reduced costs, with lesser complexity in business operations, can be empowered with Blockchains while also creating avenues for evolving business models. Financial entities can reap many more rewards when the clutter and complications of multiple ledgers are taken off, and lower transaction costs can be tapped successfully. Endless days for clearing and final settlement are now a thing of the past as transaction times become real-time and available all the time. LOOKING FORWARD The stakes of blockchain are undeniably too enormous for financial services firms to seek a wait-and-see approach. The Blockchain technologies drastically streamline operations and cut down costs
5 Tips to Survive NAB Show 2018
It is that time of the year again. In less than a week more than 100,000 people will take the city of Las Vegas with a storm to attend the ultimate event for the media, entertainment and technology industry, NAB Show 2018. Scheduled for April 7-12, NAB Show will witness more than 100,000 attendees, 200+ sessions, over 1700+ exhibitors and above all, countless networking opportunities. This conference has a lot to offer to its attendees, and this year the event has been beefed up with a lot more of exciting stuff like new conference programs, international pavilions, community mixers, Braindate and much more. Here are some tips that might help you sail through the NAB Show without missing the essential programs. 1) Getting started: The first step to getting yourself accustomed to the convention is to explore the floor plan which gives you an option to search for exhibitors, booths, sessions, speakers, etc. Also, you can save the things you want to remember with a free My Show Planner account. Download the NAB app on your smartphone to have it handy. 2) New attractions: During the show, while you will be busy exploring the different solutions and tools, you should also check out the new things happening at the conference, and you should plan them before you get there. Here are our ‘TOP five’ picks for this year a. AI Experiential zone b. Ad Innovations c. Next Gen TV Autonomous Transport d. Braindate e. South Upper Draft House 3) Bring these to the show a. Comfortable bag: You will collect a lot of paper and swag at the show. The last thing you want is an uncomfortable bag that cannot hold it all b. Your badge: How else will you gain an entry into the show c. Other utilities: Business cards, phone charger, hand sanitizer, etc. 4) Transport: The organizers at NAB have made it easy for you to get around this year. Have a look at the Shuttle Bus Schedule and save it for use during the show 5) Plan and prioritize: If you are attending NAB this year, you should spend most of your coming week in looking at the different activities, events, sessions, etc. happening in and around NAB. Register for the event as soon as you find them. Remember, you won’t get to see everything. The key is to plan and prioritize. Bonus Tip: Don’t forget to have fun Along with all the presentations, sessions, demos and thought leadership, NAB Show 2018 also has a lot of fun events that you should add to your plan. Here is a list of some parties and after-hour events to consider: NAB Show 2018 parties Most important for all, try not to get intimidated or overwhelmed with all the socializing happening around you. Instead, make the most of this opportunity by planning. Among all the exhibitors, Tavant will be showcasing its data-driven solutions for the broadcasting industry at booth SU7323AD. Drop by to see some cool demos or a casual chat with our experts.
Redefine Digital Mortgage Experience with Encompass® COE
Digital Transformation is set to transform the mortgage industry by addressing issues ranging from customer experience, regulatory compliance, asset quality & risk, to efficiency and cost management. Lenders must embrace digital transformation or risk becoming irrelevant. Organizations that do not formulate a comprehensive digital strategy may lose business to competitors. The National Association of Realtors® reports that 90% of all home buyers search online for their home. For 42% percent of that group, the internet was their first step in the home buying process — before contacting an agent. According to the Ellie Mae Millennial Tracker™ report, tech-savvy Millennials represent the primary home-purchasing segment of the population (Millennials accounted for 84% of closed home loans in January 2017). Millennials these days depend on intelligent personal assistants such as Apple’s Siri, Amazon Alexa, Google Personal Assistant, and Microsoft Cortana. Apparently, many of these assistants function on devices that don’t even have specific screens and provide only a single “answer” to the customer’s query — as opposed to a list of results. Put another way, if the online listings for your mortgage business don’t include things such as your specialties, your credentials, and the languages you speak, your customers will not be able to find you if they search using those parameters. Improving customer experience is paramount to meeting the expectation of today’s consumers. According to published reports, 48 percent of US consumers believe companies need to do a better job of integrating their online and offline experiences. Digital natives such as eBay, Amazon, and Google have been leading the pack in remodeling consumer expectations for cross-channel convenience. In today’s evolving mortgage industry, to gain a competitive advantage, organizations must transform the customer experience. Positive customer experience can have profound impacts on your organization’s growth. Delightful customer experience is a long-term competitive advantage you can leverage to differentiate yourself in the market. While this may sound little daunting, companies are in the process of revitalizing their customer experiences every day. Are you looking to capitalize on the digital transformation? Embrace digital transformation and enhance your lending experience with Tavant Encompass Managed Services Tavant is a trusted Pro Partner that helps lenders to accelerate the deployment, customization, and adoption of Ellie Mae’s Encompass® all-in-one mortgage management solution. Our seamless integration with the Encompass ecosystem enables operational efficiency, reduced cost, effective maintenance, enhanced performance leveraging custom applications. We help our clients to easily adopt and leverage Encompass upgrades. We offer flexible and transparent delivery models to provide them with a mix of onshore, near-shore and best-shore managed services. FAQs – Tavant Solutions How does Tavant help lenders redefine their digital mortgage experience through Encompass COE?Tavant provides Encompass Center of Excellence (COE) services that optimize mortgage workflows, implement best practices, and maximize platform capabilities. Their expertise helps lenders transform their Encompass implementation to deliver superior digital mortgage experiences through process optimization, automation, and user experience improvements. What specific Encompass COE services does Tavant offer for digital mortgage transformation?Tavant offers Encompass configuration optimization, workflow automation, integration development, user training, performance monitoring, and continuous improvement services. Their COE approach ensures lenders maximize their Encompass investment while delivering efficient, compliant, and customer-friendly digital mortgage processes. What is an Encompass Center of Excellence (COE)?An Encompass Center of Excellence (COE) is a specialized team or service that provides expertise, best practices, and ongoing support for optimizing Ellie Mae Encompass (now ICE Mortgage Technology) implementations. It focuses on maximizing platform capabilities, improving workflows, and ensuring optimal system performance. How does a COE improve digital mortgage experiences?A COE improves digital mortgage experiences by optimizing system configurations, implementing best practices, streamlining workflows, ensuring proper integrations, providing ongoing training, and continuously monitoring performance. This results in faster processing, better user experiences, and improved operational efficiency. What are the benefits of having an Encompass COE?Benefits include optimized system performance, improved user productivity, better compliance management, enhanced customer experience, reduced operational costs, and maximized ROI on technology investments. A COE ensures continuous improvement and optimal utilization of Encompass capabilities.
How Mobile Solutions Can Reduce Warranty Costs
As technology advances every day, so do customers’ expectations from manufacturers. To be competitive and to survive in the market, manufacturers must provide improved solutions with lower costs. These goals can be achieved through mobility solutions. 1. Maintenance of Accurate Data Unavailability of exact product and customer information is a major challenge in the warranty industry. Mobile solutions help in capturing that exact data. Field service personnel can visit the customer site and capture the proper customer address, contact information, usage details, and service information. Maintenance of proper data helps in providing the correct coverage and maintenance, which in turn, helps to reduce warranty costs. Proper data also gives insights about warranty problems. 2. Lower Transit Time Field inspectors visiting the customer site can check machinery, perform the repair at the customer site, and update the problems directly from the mobile. The warranty team can start working on the case immediately. This reduces delays between various departments, speeds up the process and reduces the warranty costs. 3. Improved Process Mobile solutions help in reducing paperwork. When using a manual process involving paperwork, there’s a chance valuable data could be missed. Mobile solutions help in avoiding duplicate entries and important data cannot be missed since everything is maintained electronically. Regular reminders are sent to dealers, contractors, and field inspectors. This improves the overall warranty process, which in turn reduces the total cost. 4. Real-Time Connectivity Mobility solutions help in managing the process from any location. GPS monitors can be integrated with a vehicle to track its location. Telematics help to monitor the driving pattern of the vehicle, which reduces fraudulent claims and parts and service costs. It also helps to identify failures earlier, which helps to increase warranty cost savings later. 5. Increased Productivity Mobility solutions provide an option for employees to contribute to business process even while not at the office, which increases productivity. For example, the warranty processes like Warranty Registration, Arrival Condition Report, and Inspection can be done during installation/delivery from the customer site itself. The warranty team can start working on the claims immediately. This helps in improving productivity, thereby reducing warranty costs.
Evolution of Automotive Ecosystem
Decreasing sales, environmental regulations and increasing demand for more efficiency and new features are challenges every other manufacturer is looking to overcome. These challenges may decide the future of the automobile industry. If powerful engines, composite material, and lighter weight engineering were the trends at the start of 20th century, going forward, what may disrupt the industry is electrification, connected cars, diverse mobility and autonomous driving. These changes are not only important from the perspective of the automobile industry, but will potentially impact multiple other industries, such as insurance, high-tech, and telecommunication, connected with these solutions. Electrification The electric vehicle market is forecasted to grow at a CAGR of 23% through 2021, according to market research firm Technavio. There are multiple factors that may push for electrification, such as a drop in the price of battery prices (prices may fall by 70% by 2030(1)), government support in the form of tax breaks, incentives and benefits, and most importantly lower maintenance costs. What could further support this change are government initiatives to build and maintain electric charging stations in major cities as well as on connecting routes. Connected Cars (Vehicle-to-Vehicle Communication) Vehicle-to-vehicle communication is one of the critical new changes that may have a huge impact on passenger safety. With vehicles communicating with each other to share details such as speed, the direction of travel, and traffic conditions over a dedicated network, the speed and response period of every vehicle on the same road could be synchronized to the vehicle in front, thereby reducing the probability of a collision. According to WHO, auto accidents cost most countries almost 3%(2) of their gross domestic product (GDP). According to the U.S. Department of Transportation, deploying vehicle-to-vehicle communication can reduce 80% of the accidents that occur on roads in the U.S. Diverse Mobility Consumers today use their all-purpose vehicles for a wide range of tasks, but in the future, they may demand individual solutions for specific purposes, on demand, probably via their smartphones. There are already trends that point toward this change, such as a 30%(3) increase in car-sharing members in North America and Germany over the last five years. According to McKinsey, one in ten cars sold globally in 2030 will potentially be a shared vehicle, which could also mean more than 30% of miles driven in a new vehicle could be from shared mobility. Autonomous Driving With commuters spending an average of 42 hours every week in traffic in places like North America, there is a huge demand for autonomous driving, which could help drivers refocus and invest their time in more productive activities. The time spent in traffic increases to 104 hours per week in Los Angeles, the highest in the world, followed by Moscow where a commuter may spend 91.4 hours per week during peak time, according to the INRIX Global traffic scorecard. The beneficiaries. OEMs would now be looking at plethora of information getting generated from individual equipment to not only improve the product, but also to create a new set of complementing products and services, such as networked parking service, vehicle usage monitoring and scoring (a service already available in many markets), predictive maintenance, over-the-air software updates and add-ons that could become alternate sources of recurring income for the OEMs. Dealers may move away from sales of vehicles to a fleet management model, managing only the service part of the business, resulting in highly consolidated market players with huge fleets. The transportation sector will be able to optimize its operational expense with autonomous driving opportunities for faster expansion and cost-cutting. IT companies and semiconductor manufacturers may become the largest suppliers for OEMs moving forward. With digitization and the electrification of the automobile, the major components that would come into play are the electrical hardware that will run the vehicle, the semiconductors that will be the brain for operations, and the software that will drive the logic on how the vehicle will operate. Companies that are able to integrate these into a single package (auto vision, artificial intelligence, IOT, etc.) may develop more of an edge over other companies. What is in it for others? Nearly 1.3 million people die globally due to car accidents. In the U.S. alone, for every death, there are 100 treated in emergency rooms, with an annual cost of USD 33 billion (4) in 2012. Autonomous driving could help reduce health care costs and change the car insurance industry completely. The telecom sector would benefit from the increase in traffic on their networks because of vehicle-to-vehicle communication but may have to upgrade its infrastructure to support higher speeds and lower latency. Electric utility companies may be one of the biggest beneficiaries of electrification; according to the 2017 report by Bloomberg New Energy Finance (BNEF), electric vehicles could account for nearly 54% of new car sales by 2040, which could mean a requirement of more than 1900 TWh of electricity every day — equivalent to 8% of global electricity demand in 2015. (1) Electric Vehicle Outlook 2017 by Bloomberg New Energy Finance (BNEF) (2) http://www.who.int/mediacentre/factsheets/fs358/en/ (3) https://www.automotiveworld.com/analysis/eight-disruptive-trends-shaping-auto-industry-2030/ (4) CDC 2014: Motor Vehicle Crash Injuries -Costly but Preventable
Digital Innovation FAQs: Customers, Experience, and Disruption in Consumer Lending
Digital Experience (DEX) decides your next strategic move today. Customer journeys have taken the front seat and are fueling the disruptive force. Consumer Lending organizations looking to connect the dots of digital innovation often ask me to address these FAQs #1 What is Innovation? This is the most asked question in our Digital Experience (DEX) engagements. Simply put, ‘innovation’ is about new ideas that generate value for both the customers and the organization. In our DEX workshops, which are typically about 4-6 weeks, we work with our clients to understand their customers and their brand values… it makes innovation and the opportunity space tangible. That helps us generate innovative ideas that unlock value for both customers and business and reflect their brand values. Everyone wanted to be Apple. Decades later, there’s still one Apple. Google, Amazon, Facebook… they all did what they are good at… even Microsoft now. The key is to stay focused on your customers, listen to them and stay true to your brand values and capabilities to deliver great digital experiences. A lot of the opportunities in regulated industries like financial services and consumer lending are in making complicated things simple: – simple to understand, – simple to buy, – simple to sell. Beyond that, digital experiences are about helping borrowers focus on buying their dream home and helping brokers and loan officers to build relationships by focusing on what their customers want and freeing up time… instead of worrying about document verification, regulations or what are a hundred things to check. That’s where the most significant opportunities lie. #2 How do you deal with Millennials? Customer Experience starts with understanding customers, and it’s no different for millennials, though many of us are not millennials. Interestingly, we find millennials also want good relationships with their mortgage lenders and brokers. A recent Fannie Mae survey found that almost 2 out of 3 customers relied on real estate agents and lenders for information. Millennials are also looking for help from lenders, brokers first and they appreciate transparency. Of course, they are more than happy to use digital channels to complete forms, but they also want to talk to their loan officers and brokers. They complement each other quite well, and we try to ensure the digital ecosystem is there to enable this interaction and deliver exceptional experiences. …what about loan officers and brokers? Do you still need them? They are vital to the experience! Contrary to what many lenders think, our research finds most customers (borrowers) are commonly influenced by them, and they remain the most trusted, along with friends and family. They remain some of the delightful experiences that we design for. Fannie Mae also found that over 90% customers (including millennials) want to use in-person channels at key points…they want to talk to their lenders. This is not about a loan approval; this is about buying your dream home. #3 What about the latest trends… Design Thinking, Artificial Intelligence (AI), Big Data? It’s about the relevance of the trends. We stay on top of the latest trends and set some of them as well. At Tavant, we work with clients on defining customer-centricity programs and the omnichannel strategies that can enable great experiences. The focus is on customer and business value and finding relevant solutions; the digital experience is really about the customer experience. Lemonade, perhaps, is one of the better examples of that. They use chatbots to settle claims within minutes, and most of their customers are honest because of that little behavioral tweak where they ask customers to pledge to be honest first. Technology by itself uncovers excellent operational efficiency. That remains a focus but, in our DEX engagements, we try to define digital experiences that unlock immense value. We have been fortunate to work with clients who trust us with cutting-edge technology and setting the benchmarks in these areas. Design thinking, the blockchain, behavioral design, big data, AI…they will transform digital experiences as we know it today. We see tremendous opportunities in some of these trends and innovation, but it is all about what is relevant to our clients. The strategy has to be based on the company’s brand values, its culture and how it is most pertinent to their customers. #4 But where do you start? What next? More on strategy, simplicity, and execution in my next post. Stay tuned! Digital Innovation FAQs Part II FAQs – Tavant Solutions How does Tavant enhance customer experience through digital innovation in lending?Tavant creates omnichannel experiences with personalized loan recommendations, real-time application tracking, instant approvals, and seamless digital onboarding. Their innovation lab continuously develops customer-centric features based on user feedback and market trends. What disruptive digital innovations does Tavant bring to consumer lending?Tavant introduces voice-activated loan applications, biometric authentication, AI-powered financial advisory, blockchain-verified credentials, and augmented reality property evaluations to revolutionize the lending experience. How is digital innovation changing customer expectations in lending?Digital innovation has raised customer expectations for instant responses, personalized offers, transparent processes, mobile-first experiences, and seamless integration with their digital lifestyle across all lending touchpoints. What digital features do customers want most in lending?Customers prioritize instant pre-approval, mobile applications, real-time status updates, digital document upload, rate comparison tools, and personalized loan recommendations based on their financial profile. How do traditional lenders compete with fintech companies?Traditional lenders compete by adopting digital technologies, improving customer experience, leveraging their trust and stability advantages, forming fintech partnerships, and investing in innovation while maintaining regulatory expertise. What advanced customer experience innovations does Tavant offer beyond basic digitization?Tavant provides predictive customer service, proactive financial health monitoring, AI-driven cross-selling, personalized payment scheduling, and integrated financial wellness tools that go beyond traditional lending to support customer financial success. How does Tavant help lenders stay ahead of customer experience disruption?Tavant offers continuous innovation programs, customer journey analytics, A/B testing frameworks, and emerging technology integration services. They help lenders anticipate and respond to changing customer needs before disruption occurs. What is the next phase of digital transformation in lending?The next phase includes hyper-personalization, conversational AI, embedded
Reasons Why Extended Warranties Are a Must
In 2016, $23 billion on protection plans and $17 billion on vehicle service contracts were spent by consumers on appliances, mobiles, electronic appliances and computers1. Extended warranties are one of the largest businesses in the U.S. How is an extended warranty beneficial to a customer and why should they opt for one? By ‘mobiles’ I think you mean smartphones, but we don’t say that in the U.S. Is that what you meant? When you want to keep your vehicle for a longer period of time: When we like our vehicle, we want to keep it for a longer period of time. An extended warranty helps by providing warranty coverage beyond the warranty tenure to help maintain the vehicle for a longer period. An extended warranty or vehicle protection plan helps to keep the vehicle running smoothly and hassle-free. Repairs are more costly than having an extended warranty on the vehicle: Repair bills on a vehicle can often be very costly. Service appointments are also tiresome and inconvenient. The more you drive your vehicle, the more you will pay for maintenance costs and you run the risk of more repairs. Having an extended warranty saves you money in the long run. Customer satisfaction through peace of mind: The most important aspect of an extended warranty is peace of mind. Owners pay a little more to have an extended warranty, but one of the main benefits of warranties outweighs the cost: peace of mind. That peace of mind assures owners that any needed repairs will be covered. Purchase options: Most consumers mistakenly believe an extended warranty must be purchased only from the dealer or the OEM for a vehicle — not true. Owners can purchase extended warranties from other companies that offer more competitive warranty terms. Consumers can analyze different coverage plans and shop for the one that best suits their needs. Coverage options: There are companies today that offer options to purchase an extended warranty even after the original warranty has expired for the vehicle. Owners are not compelled to buy an extended warranty only for the vehicles for which the warranty is going to expire. Owners have the option to purchase extended warranties for the vehicles for which the warranties have expired. Based on the owner’s needs, the owner can opt for better coverage that suits his requirements. Sometimes, the extended warranty is never used. Buying an extended warranty is similar to health insurance, which we might never need, but we all know that “precaution is better than a cure”. In cases of a large repair bill, an extended warranty acts as a savior and covers all the expenses. We’re listening. Have something to say about this blog post? Share it with us on LinkedIn, Facebook, Instagram and Twitter. OR Please add your thoughts, ingenious analysis and novel strategies in the comments section below. We look forward to hearing from you. Meet our AfterMarket experts at Warranty Chain Management conference, WCM 2018 in San Diego from March 6-8, Booth 11. References: http://www.jdpower.com/cars/articles/tips-advice/pros-and-cons-buying-extended-warranty-car
Transforming Customer Engagement Using AI
When you buy a new vehicle today, you automatically subscribe yourself to the usual ritual of taking the vehicle for the scheduled service so that the equipment is 100% operational and the warranty does not get void. This is not always a pleasant experience for the end customer since they have to keep track of the distance the vehicle has covered, or the days covered from the registration date to align with prescribed service schedules. Finally, when they take the vehicle for service, there may be a long waiting period, and in the end, the whole service may just be an inspection of the vehicle parameters and a basic preliminary service. This process creates apprehension in the mind of the customer regarding the whole process of scheduled service. OEMs focus a lot on customer engagement in the initial phase of the customer lifecycle, but there are little efforts to improve the experience once the sale is done. This in turn severely impacts the customer retention process. With the advent of new technologies, maintaining a consistent customer experience throughout the lifecycle becomes easier for the companies. Let’s look at a few existing solutions which can change the customer experience drastically while improving efficiencies upstream in the supply chain. Vehicle Telematics combined with Artificial Intelligence (AI): Most of the modern vehicles today come with an inbuilt telematics solution from the factory floor or at least have it as an aftermarket option. This system can capture and transmit the real-time information of the vehicle to an AI solution which will identify when exactly the vehicle should be brought to a service center and at the same time communicate the same to the customer. This will not only reduce the burden on the end customer to keep track of the scheduled maintenance but can also help to reduce the load on the service centers due to visits which may not be warranted. The solution can further suggest servicing slots (like booking movie tickets) to end customer so that load can be balanced across the complete servicing capacity. This will also have a significant benefit upstream in the supply chain with parts supplier being able to predict the possible demand for their parts at various geographical locations during specific time intervals in the future, based on the real-time data while removing the total dependency on the historical data for production planning. The solution once developed needs to be delivered to the end customer in a robust and scalable platform. Mobility: With over 37% of the world’s population expected to use a smartphone by 2018 from the 10% in the year 2011, this is a platform every company should take advantage of to reach to their end customers. By going mobile, companies can not only reap the benefit of being connected 24/7 with their customers but can use it as a platform to deliver wide array services both free and on demand. Companies can also use the mobile platform to communicate with their customers, provide a snapshot of the vehicle performance, help the customer book the servicing slot as per their convenience and provide customer support using integrated chatbots. Integrating all the key stakeholders with such a solution can help improve the operational efficiency as well as the customer satisfaction. Customers get notified when a service is due and get an option to quickly schedule it in advance, while the servicing centers can see the expected number of vehicles for the future dates and have the resources allocated to get the most optimum results. For all the stakeholders upstream in the service chain such as the parts supplier, this could help them move from the demand push to a demand-pull model wherein their production plan is synchronized to the predicted service schedule and the part replacement. Hence, it is a kind of win-win situation for all the stakeholders in the service chain ecosystem. Final Thoughts AI-powered customer service is a new reality. Customers aren’t waiting for companies to catch up, they simply shift their loyalty to a competitor with superior experiences. Companies hesitating to adopt, or even experiment, with AI, are already losing the innovation game and losing customers. AI is the future, and the future is now. Meet our AfterMarket experts at Warranty Chain Management conference, WCM 2018 in San Diego from March 6-8, Booth 11.
7 Mistakes That Are Stopping Your Retail Customers to Digitally Connect With You
Do you think you know your customers well? Are you confident you understand how they experience your brand in a myriad of online and offline interactions? Well, here’s some sobering news: Even if you think that you have a firm grasp on your customer experience, that’s all going to change sooner than you think. Customer experience has undeniably become the next battleground for business and the quintessential scale to pick between brands. According to Forrester, 72% of businesses say that enhancing the customer experience is their top priority, while only 63% prioritize on implementing technology investments to reach their goal. Interestingly, market leaders are decided based not just on which company has the superior product at the lowest price, but on which company manages its connection with customers the best as ‘The Great Wall of Digital’ is being built between organizations and customers. How are you responding to the change? Do you feel disconnected with your retail customers? A few considerations 1. Not keeping it Simple Solution– Today’s customers expect an easy-to-use interface across all channels, an exciting in-store experience, and fast service 24/7. Yet many organizations, especially incumbents, struggle to meet these expectations because of not so it user-friendly and intuitive interface. Remember, a simple user experience unfolded with crisp and clear user interfaces goes a long way in the saga of man-machine interactions. 2. Not establishing an emotional connection with your customers digitally Solution: Embedding technology in your day-to-day marketing operations doesn’t mean you’re sacrificing a human connection. That indicates treating every touchpoint with your customers like a face-to-face conversation. With customer data easily available, organizations can tailor their content to connect with customers on a more personal and emotional level. 3. Not getting a unified view of the customer Solution: Remember that data integration is the secret sauce to the customer journey. You should connect disparate data silos for a comprehensive look at your customers—gather customer insights and interactions in one place and get a 360-degree view of your customers to anticipate their requirements and optimize the customer experience. 4. Not providing consistent omnichannel CX Solution: No matter what industry you operate in, your customers expect to be able to engage with you effectively across multiple channels. Why? Customers typically want to get what they want from your business quickly, efficiently and on their terms – be this on your website, via your mobile app or by engaging with your customer-care team by phone, live chat or any other means. Creating a single, uniform face to your customers that delivers them with a consistent experience as they move across channels is, therefore, key to success in this omnichannel world. 5. Overlooking Personalization- the hidden ingredient to engage your customers Solution: You need to build an insightful and personalized shopping experience that connects digital, in-store, and back office operations. You must adapt to constantly changing needs, and provide phenomenal customer service by leveraging the Next-Gen technologies and innovation. Consider offering more product selection and recommendations by combining the best of online and in-store shopping. 6. Not building immersive retail experiences Solution: You need to elevate buying behavior by deeply engaging your customers through personalized retail experiences. Seek more control over store operations through automation and advanced analytics capabilities. You must provide your customers the adaptability to make a purchase in-store, pick up in other locations, or have it delivered to their doorstep. 7. Not calming your impatient customer Solution As it turns out, intensely digital customers are also intensely impatient. They’re also not as wedded to digital experiences as we would like to believe. To retain this fickle and fast-moving group engaged, you need to focus more on dazzling them with superior digital service across all channels of interaction. In Conclusion: If you think the digital era is causing a disconnect between your brand and your customer, think again. Too many companies squander the treasure that is customer feedback. Remember, customers feel disconnected when you fail to think through the degree of effort it requires to do business with them, you don’t provide user-friendly technology solutions, you don’t simplify every touchpoint and you don’t provide the personal touch. That’s what causes a disconnect between the two of you! The solution is to get closer than ever to your customers and that too, so close that you tell them what they need well before they realize it themselves. Create a digital strategy that places customers at its center to drive innovation that they will value, and then operationalize the model consistently. Extraordinary digital connections can undoubtedly deliver extraordinary results.