Our client, a leading European bank, sought to revolutionize their consumer lending process. They aimed to enhance the end-to-end journey for retail customers applying for personal loans, overdraft facilities and cash advances. HCLTech's solution introduced three distinct application paths tailored to various customer scenarios, with a strong emphasis on automation and operational efficiency.
The Challenge
Addressing consumer lending hurdles
Our client faced many challenges with the consumer lending process that hindered operational efficiency and customer satisfaction:
- High dropout rates: Approximately 15% of loan applicants abandoned the process due to document submission requirements. Variability in document requests and timing led to frustration and dropout.
- Back-office overload: The Customer Loyalty Team (CLT) faced heavy workloads, exacerbated by manual document evaluation and processing. Delays in critical tasks like offer letter verification led to customer dissatisfaction.
- Cost inefficiencies: Our client incurred significant costs from the creation of multiple complex Pega cases for each application, particularly when applicants abandoned and restarted the process.
The Objective
Optimizing processes and cost structures
The primary objectives were to minimize dropout rates, alleviate back-office burdens and optimize cost structures. Our client sought to enhance customer satisfaction by simplifying the application process while improving operational efficiency and reducing expenses.
The Solution
Streamlining consumer lending operations
In the quest to optimize consumer lending processes, several key strategies were employed to enhance efficiency and reduce operational costs:
- Automated processing: The implementation of straight-through processing (STP) was pivotal in addressing high dropout rates among loan applicants. By enabling loan disbursements without the cumbersome requirement of document uploads, the dropout rates were significantly reduced. Additionally, integrations with external sources facilitated the retrieval of necessary information, minimizing user effort and streamlining the overall application process.
- Efficiency enhancements: A concerted effort was made to streamline manual tasks within the CLT. This initiative aimed to empower CLT members to focus on critical activities such as offer processing and customer service. By reducing manual workload, CLT members could allocate their time more efficiently, resulting in faster offer processing and ultimately enhancing the overall customer experience.
- Cost optimization: A redesign of the application architecture introduced a parent-child relationship for cases, leading to substantial cost savings. This new approach significantly reduced Pega case creation costs by simplifying the overall structure. Parent cases acted as simple placeholders, minimizing complexity and streamlining the cost structure associated with case management.
Through these strategic initiatives, the organization achieved notable improvements in efficiency, customer satisfaction and cost-effectiveness within their consumer lending operations.
The Impact
Driving change with noteworthy improvements
We observed two major improvements post implementation of our solution:
- STP rate increase: Pre implementation, the STP rate for retail loan processing stood at 26%. Post implementation, the rate surged to 67%, indicating a dramatic improvement in process efficiency and customer experience.
- Cost reduction: The introduction of parent-child case relationships resulted in a 50% reduction in case count within a month of going live. This equated to approximately €150,000 in savings per quarter, demonstrating significant cost efficiencies.
