Enhancing Loan Origination Systems and Customer Onboarding with Business Journey Observability

When it comes to financial services, today, customer expectations are higher than ever. Imagine a potential borrower eager to secure a loan, only to face frustration due to a complex and opaque application process. This scenario is all too common, with many loan application abandonments halfway through due to unanticipated issues, lack of transparency, and inefficiencies in the system.

The challenge is clear: how can financial institutions reduce these drop-offs and ensure a seamless, efficient, and transparent customer journey? Enter VuNet’s business journey observability platform, a revolutionary approach designed to address these challenges head-on.

Understanding the Drop-Off Problem

Loan origination systems (LOS) are intricate by nature, managing numerous steps from the initial application to the final disbursement. Each of these steps involves multiple API calls to external entities, making the process even more complex. Integrating these steps seamlessly is critical, yet many traditional systems struggle, leading to:

• Siloed Visibility: Limited insight into the overall loan application process.
• Bottlenecks: Difficulties in pinpointing where the process slows down or fails.
• Reactive Issue Resolution: Often addressing problems only after customers report them.
• Inconsistent Customer Experience: Undetected issues causing frustration and drop-offs.

The story is similar in customer onboarding, where identity verification, compliance checks, and account setup can become pain points leading to potential customers abandoning the process.

The Impact of Drop-Offs: A Customer Story

Let’s bring this to life with a real-world scenario.

Imagine Nita, a young professional who is at a retail store looking to purchase a new refrigerator. She is thrilled to discover that she qualifies for a pre-approved consumer durable loan from her bank, making the high-cost purchase manageable with easy monthly installments. She is directed to use the bank’s mobile app to complete the loan application process.

With excitement, Nita opens the app and starts the application. The initial steps are smooth; she enters her personal details and selects the loan amount. The app then attempts to verify her identity with an external service, checks her credit score, and performs other necessary verifications. However, during the integration with an external API for credit scoring, the system encounters a glitch. The verification process fails, and the app displays an ambiguous error message.

Confused and frustrated, Nita attempts to restart the process but faces the same issue. After several unsuccessful attempts, she abandons the application, deciding to either forego the purchase or use another payment method. This drop-off not only impacts Nita’s customer experience but also results in a lost opportunity for the bank to issue a loan and generate revenue.

The Business Impact

Nita’s story is not unique. Each drop-off represents a potential loss of business for financial institutions. When customers abandon their applications, banks miss out on opportunities to extend credit and earn interest. Moreover, the repeated failures and lack of transparency damage the bank’s reputation, making customers wary of using their services in the future.

For businesses, this translates to:

• Lost Revenue: Missed opportunities to issue loans and earn interest.
• Decreased Customer Satisfaction: Frustration and dissatisfaction among customers can lead to churn.
• Operational Inefficiencies: Time and resources spent on addressing customer complaints and troubleshooting issues reactively.

The Need for Real-Time Observability

To prevent scenarios like Nita’s, financial institutions need real-time visibility into their loan origination and customer onboarding processes. This is where VuNet’s business journey observability platform comes into play.

VuNet’s Approach to Observability in LOS and Customer Onboarding

VuNet’s pioneering approach to business-centric observability in digital lending journeys focuses on use cases around eKYC, PAN validation, and loan approval. It provides insights into the entire customer journey across multiple business processes. This holistic view can reveal how different stages of the journey interact and impact each other.

VuNet’s observability solution for lending breaks down the complex journey outlined above into smaller micro-journeys and associates not only technical metrics but also business KPIs with each step, microservice, external API, or infrastructure element involved. The shift from a siloed to a journey-based way of viewing the system leads to several improvements over traditional observability:

• End-to-End Monitoring: Continuous monitoring of the entire loan application process, including submission, approval, and disbursement stages, along with a real-time view of user journeys and lead signals therein.
• Real-time Alerts: Immediate alerts for any anomalies or failures, enabling proactive resolution.
• Business Metrics: Detailed metrics on application conversion rates, application completion times, channel-wise abandonment rates, processing times, approval rates, and user interactions.

  
  Fig: Summary Dashboard with real-time insights on journeys, and drilldowns on different parameters like location.

• Bottleneck Identification: Quick identification and resolution of process bottlenecks or delays.

  
  Fig: Diagnostics dashboard showing hop-wise transaction visibility, highlighting issues in the External Authentication and Eligibility and Approval steps.

• Comprehensive Tracking: Full visibility into the customer journey from initial interest to successful onboarding. Allows accelerated distributed tracing of transactions end-to-end across the stack and possibilities to search and analyze individual transactions based on a unique ID. This aids in customer support, transaction audit and dispute resolution. 
  
  
  Fig: Transaction tracing with stage-wise analysis for auditing purposes

• Drop-off Analysis: Identification of points where potential customers abandon the onboarding process.
• User Experience Optimization and Nudges: Insights into user behavior enable designing a smoother onboarding experience. When drop-offs are detected, users can be nudged back in real time to complete their application.

Conclusion

In an era where customer experience is paramount, VuNet’s business journey observability platform offers a game-changing solution for financial institutions. By providing real-time insights and a holistic view of the entire customer journey, VuNet helps reduce drop-offs, enhance user satisfaction, and ensure a seamless, efficient process for both loan origination and customer onboarding.

Embrace VuNet’s innovative approach to observability and transform your LOS and onboarding processes to meet the high expectations of today’s digital customers.

For more information on how VuNet can help your organization, visit our website or contact us today.