Traditional banking models have been disrupted and due to the pandemic, the shift towards innovation and going digital have become the undisputed priority. One of the big questions with community banks is how can they win in 2021? For many, a big piece of that answer lies within business relationships.
Banks will be challenged to strengthen their relationships with businesses and will need to work alongside their communities to help them regain their footing in this new economic environment. Economic relief efforts are temporarily keeping businesses afloat, but banks need to think about what comes next when short-term cash infusions reach their limits, including looking at evolving market trends.
At Artis, we power real-time lending and payment solutions that enable banks to drive demand to businesses by offering consumer financing at the point of need. Below are 3 ways banks can win long-term by offering point-of-need lending solutions to their business customers.
1. Enrich relationships with your business customers
We believe that the more products and services a business has with their financial institution, the longer they will be a customer and the higher their deposits will be. By offering more value-add solutions for business customers, that customer will be engaged with the bank longer and bring more revenue to the bank.
With Artis, banks can expand their footprint in the community and drive demand to businesses by offering affordable consumer financing options to consumers through their commercial customers to generate long-term cash flow opportunities, as well as drive higher deposits from those commercial customers. There is a big benefit to be gained for consumer-facing industries with higher-cost products and services, such as home improvement, HVAC, plumbing, landscape/hardscape, elective medical, dental, manufacturing, auto businesses, and many more.
For bankers, the question soon shifts from how to efficiently process PPP loans to “How do I continue to build on the relationship with my customers to help them accelerate out of this downturn?” Banks can take a leadership position by not only providing capital to help companies rebound and rebuild, but also give them the tools they need to monetize new opportunities and experience improved cash flow.
2. Generate high-quality loans, faster
Covid-19 has made the case to use alternative data to complement traditional credit models. Think about the number of non-reported delinquencies and how this will impact financial stability. Income, delinquency rates, FICO, and debt-to-income ratio have been major credit attributes for a while; however, post-Covid these attributes no longer represent the whole truth. Banks will be forced to look at alternative data sources, such as public records, utilities, social media, spend habits, employment, history of file, fraud, and risk sources. Trended cash flows will be especially important when lending to small businesses.
Artis makes consumer lending easy and fast, without compromising on the tenants of compliance, security, risk, or cost. Our platform combines alternative data sources with machine learning and AI to present real-time loan offers that are uniquely structured to each individual borrower, all done within the banking industry’s current regulatory framework.
Banks might not be pushing forward on consumer lending for a few reasons: technical challenges with bringing a point-of-need lending service to market, challenges with shifting to more digital, challenges with determining creditworthiness, challenges with integrating with commercial customers, etc. Consumers and businesses alike are still in desperate need of loans during this pandemic and beyond. Moving forward with data-driven credit decisions, a turn-key platform, and a simple integration, banks can increase the quality and velocity of distributing loan funds and therefore growing a tremendous asset to communities in need.
3. Create new distribution channels and reach new customers
One of the drivers of the future of bank and fintech partnerships will be for banks to meet the customer when and where they need financial services. Before digital banking, financial institutions met customers in their communities by adding in new, conveniently located full-service branches, ATMs, and other limited-service offices. The rise of online and mobile banking allowed customers to access financial services at their own convenience without the need to visit a branch. By partnering with Artis and leveraging business customers to create new distribution channels, banks can now reach new consumers trying to access financial services when making a purchase without the consumer ever having to leave that experience.
This model allows for financial institutions to add value and drive growth through access to their balance sheet and financial products while letting businesses own and serve their ecosystem. Businesses are seeking to become more integrated into the daily lives of their customers- banks should be empowering them to offer financial services (backed by the bank’s solid reputation for security and longevity) when consumers need it most.
Our company is taking an innovative approach to financing, making consumer lending easy and fast. We aim to eliminate the pain and frustration associated with point-of-need financing by simplifying how consumers, financial institutions, and businesses collaborate for a lasting and meaningful relationship.