Digital Lending in 2022
Brandon Ferris is Anovaa’s Chief Product Officer, responsible for developing our strategic roadmap and building best-in-class lending programs for our clients. He is a financial services industry veteran, having spent over 15 years working in consumer lending for organizations like American Express, Discover, and Fifth Third Bank. We recently sat down to discuss his quick takes on how digital lending will continue to evolve in the new year.
How have our clients shifted their lending strategies in 2021 and how are they thinking about them in 2022?
Brandon Ferris (BF): The most obvious shift that I think everyone has talked about at nauseam has been the acceleration of digital lending in a COVID world. While this continues well into 2022, I think the conversation has evolved even more than that. The reaction for many brick and mortar centric organizations was to replace lending that happened in-branch. Now, many of the discussions are around the increased customer expectation that they can do everything they need to from their home while receiving the same level of service.
Has the acceleration to digital changed the way that firms have thought about the “buy vs. build” mentality to product development?
BF: If anything, I think it’s underscored by the third element of that equation, which is partner. When banks and credit unions dig into the details, there’s a ton of opportunity to quickly transform a lending product by finding the right partner. This allows them to stand up a product quickly, understand the needs of their customer base and expand the program based on their institution’s risk appetite and growth objectives.
How are banks and credit unions thinking about the role of Artificial Intelligence (AI) in their digital lending programs?
BF: It’s a great question and I feel like everyone is evaluating AI in some way shape or form as part of their long-term strategy. In my humble opinion, this is great for our industry especially in circumstances where it allows institutions to make better credit decisions and get a fuller picture of their applicants. It will be important, especially for smaller community banks and credit unions, to get the basics down first. Having a seamless mobile-first customer experience and features that customers expect like the ability to check their rate without impacting their credit score are table stakes.
There was a lot of hype about Buy Now, Pay Later products in 2021. Will that still be the case this year?
BF: Absolutely. I recently read that BNPL is expected to make up to to $1T in global spending by 2026 which is a clear indicator it’s here to stay. New entrants like Affirm, Klarna, and others have done a fantastic job of inserting themselves directly into the customer’s buying experience. Typically a customer isn’t considering what effectively is a personal loan when they’re completing their checkout – now they are. I think with the CFPB getting more involved and starting to ask questions, more regulation is coming to that space. But I’ll leave that discussion to those on our team that are way more qualified than I to discuss.
Where is Anovaa focused from a product perspective in 2022?
BF: Our main focus for the year is to continue building a best-in-class consumer lending product that our clients can white-label as their own. We built Anovaa to support products like student loans, personal loans and education refinance, in addition to emerging products like merit-based student loans and income-based repayment plans. Our plan is to continue expanding this offering while constantly improving our product through regular upgrades as well as enhancements to our front-end UX and back-end processing workflows. There’s also a huge emphasis on promoting additional efficiencies through partner API integrations which I’m super excited about as it makes the customer’s experience even more seamless.
Anovaa is a financial technology company designed to help lenders of all sizes stand up or digitally transform their loan programs. Using the Anovaa platform, banks, credit unions and other lenders can configure their end-to-end customer experience without standing up large internal operations or significant technology infrastructure investment. As part of Entech Consulting, Anovaa has helped lenders originate over $100 billion across personal loans, student loans and education refinancing.
To learn more about how Anovaa can help your institution, visit anovaa.com to schedule a meeting with our team.