Analysis of Digitalisation of Customer Lending Services Report

This report provides a comprehensive analysis of the digitalization of customer lending services. It explores the current landscape, highlighting the increasing role of technology in financial services and the strategies employed by both new market entrants and established institutions. The report examines the positive impacts of digital lending, such as ease of access, cost-effectiveness, and increased transparency, while also acknowledging the negative aspects, including security concerns and the potential for higher interest rates. Furthermore, the report reflects on the course, emphasizing the importance of customer trust and the need for businesses to prioritize customer satisfaction in the digital age. It concludes by underscoring the transformative impact of digital technologies on the loan process and the importance of adapting to the evolving expectations of mobile consumers.

Running head: DIGITALISATION OF CUSTOMER LENDING SERVICES
DIGITALISATION OF CUSTOMER LENDING SERVICES
Name of the Student
Name of the University
Authors Note

1DIGITALISATION OF CUSTOMER LENDING SERVICES
Executive Summary
This given report throws light on the importance of digital lending to the customers in
present business condition. Digitalization of customer lending services has revolutionized the
complete procedure of bank transfers. It has provided the potential customers in assisting them to
check or keep a track on their account details. This has facilitated the end users in enjoying a
methodical financial life. In this digital age, it is important for the organization to satisfy its
customer first. Retaining the customers trust is a big responsibility of the leading organization.
The digital lending process has helped the customers through its cost effectiveness and easily
accessible techniques.

2DIGITALISATION OF CUSTOMER LENDING SERVICES
Table of Contents
Overview of the Current Affair:......................................................................................................3
Potential Impact:..............................................................................................................................4
 Positive Impacts....................................................................................................................4
 Negative Impacts:.................................................................................................................5
Course reflection:.............................................................................................................................6
References:......................................................................................................................................8

3DIGITALISATION OF CUSTOMER LENDING SERVICES
Overview of the Current Affair:
In the current scenario, digitalization is playing a significant role in providing customer
services. The customers are now using technology as a mean to shop, communicate, buy and sell
with the businesses. New market entrants as well as the established financial institutions are
battling for obtaining market shares recently within the unsecured lending spaces. The global
technological giants such as Google, Apple and Samsung are recently eyeing up the
opportunities to succeed in the financial technological sector (Christie, 2015). The investment
provided in the financial technological space has increased tremendously between 2013 and
2014. In today’s digital age, only the business model that will put their customers first would be
able to win the unsecured lending race. The business leaders need to concentrate on three major
issues for profit maximization. This includes personalization, information and trust (Watkins,
Denegri-Knott & Molesworth, 2016). The money lending industry has recently applied efficient
strategy to ascertain their customers need and providing them relevant offers.
Most of the banks are now offering money tracking services to its customers, where they
can analyze their various spending patterns. Recently ‘pocketbook’ a budget planning app was
installed to allow its customers to consolidate their overall personal financial information in a
particular area. This approach would facilitate the customer in analyzing their financial related
habits. Financial savvy consumers are applying strategy for having more control over its banking
products. The Commonwealth Bank of Australia (CBA) is using Lock, block and limit services
for its potential customers (Reddy & Reinartz, 2017). Through these services, the customer can
easily personalize its account using as per their current preferences through international

4DIGITALISATION OF CUSTOMER LENDING SERVICES
payments, blocking cash advances of ATM, limiting their expense per transaction, and putting
temporary lock on their cards.
As per Christie (2015), trust is the vital reason for the smooth running of traditional
banking and lending services. The businesses has not disrupted due to trust and loyalty of
customers. The banking sector should lay more emphasis on anti-fraud and security measures so
that it can regain their customer’s confidence. Trust equation in today’s times is the concept of
true and fair value exchange (Holmlund et al., 2017). The businesses that could offer the best
value to its customers will win the race. The customers should not feel that they are overpaying
for the achieved services. NAB has eliminated and reduced several loan limit fees and late fees,
which has enhanced in promoting the organization’s goodwill. Therefore, digital lending can
only gain popularity if power is given to its potential customers by restoring their trust.
Potential Impact:
 Positive Impacts
The positive impacts of digital lending to the customer are as follows:
Easy and quick process: the loan application made through digital lending process is completed
within few minutes. Net banking provides the bank details, which is cheaper, quickest and most
secured technique of sharing the required information (Hagberg, Sundstrom & Egels-Zandén,
2016). Moreover, the EMI payment and cash transaction is done digitally.
Cost effectiveness: minimal documentation is required for digital lending platforms. Only smart
phones and internet access is needed. The endless paperwork and photocopies are no more
required.

5DIGITALISATION OF CUSTOMER LENDING SERVICES
Social authorization is required for credit history: the organization and bank using digital
lending platforms only requires connecting with the social media profiles like Face book,
Google+ and LinkedIn (Yuksel & Sener, 2017). This helps the customers to be identified as the
borrower and saving its time but also aids in improving customer’s chances for getting their
loans approved.
No prepayment penalty- the customers are allowed to clear their loan before completion of its
loan tenure. This provides the customers in building and maintaining a positive credit history
related with platform for future loans.
Increasing accessibility and transparency: the digital lending delivery is quiet easy, simple and
continuous experience (Mbama, 2017). It provides the customers easy techniques to check their
loan status. Moreover the customers don’t require entering the data over and over again. This
would further make the customers easier to check the loan status without speaking to the
financial agents.
 Negative Impacts:
The digital lending has though bestowed heaps of benefits it has also various drawbacks:
Personal relation is not established with the organization: the traditional approach mutual bond
was developed between the customers and financial institution but that is not the case in
digitalization of customer lending services. With no proper guidelines, the customer has to often
face hassle while making the financial transactions.
High interest rates: The lending rates through digitalization are generally quiet high. This often
generate problem for the average customers (Busby, 2017).

6DIGITALISATION OF CUSTOMER LENDING SERVICES
Issues with the transaction: The digital lending transactions are complex in nature. Sometimes
the online transferring of services might get fail and hamper the mode of transfer. In that case, it
is better to resolve the issue personally or face to face.
Security issues: in the recent times, theft is a major issue in providing digital services to the
customers. If the encrypted software is not secured then the entire confidential accounting
information will be leaked in the web (Johnson & Verdegaal, 2016). This would further pose
serious threats to the financial transactions.
Course reflection:
In the era of globalization, digital lending is increasing at a rapid rate among the top
companies. It is the procedure in which loans are made electronically from to start to finish. In
the fast growing market, web based companies providing financial services are maximizing their
productivity. Start up lenders related to digital lending have also originated billions of dollars in
the recent years. It is a straight through process in which the loans are easily made available to
the potential customers no matter how difficult is the existing circumstances. Providing
maximum customer satisfaction is the main aim of the businesses. It has made our life easier. If
we have an adequate internet connection, we can bank anytime and from anywhere. Customer
support team is available to handle the issue if internet is not available. Digitalization in
providing banking services has made our life faster, easier and efficient. Customers can always
track their financial transactions and keep a firm check on their account balance through this
mode of banking.
Digital lending provides a platform for those people who can lend their money to the
potential borrowers looking for loans. This approach enables the borrowers and lenders all across

7DIGITALISATION OF CUSTOMER LENDING SERVICES
the globe to connect with each other. In need of emergency, like travel, health, wedding and
home improvement the required fund can be generated without wasting any time. Large
successful enterprises are now entering into this unsecured lending sector to gain advantage in
the existing fierce market condition. For gaining this competitive advantage the customer needs
to be given prior importance by the business houses. If the consumers are allowed the power it
will help in restoring and maintaining their trust by the organizations. Advances in digital
technologies as well as expectations of mobile consumer’s are shaping the future of business
organizations. This technology has automated the entire loan process from risk rating to the
ongoing monitoring system. The simple technique has enabled rapid and accurate decision
making process through online credit check. Moreover, the organizations are ready to fulfill their
customers unfulfilled needs by providing flexible loans that is easily obtainable and accessible at
the point of need. The digitally powered decisions making process has further enabled high
customer acquisition processes. Maintaining and retaining the trust of customer in this digital age
is a biggest challenge for the emerging business enterprises.

8DIGITALISATION OF CUSTOMER LENDING SERVICES
References:
Busby, D. (2017). Adopting the best approach for a digital banking solution: Combine the
benefits of the ‘build’,‘buy’or ‘outsource’options. Journal of Digital Banking, 2(1), 43-
50.
Christie, R. (2015). Digital lending revolution: ‘The battlelines are drawn’. Finsia.com.
Retrieved 26 January 2018, from
https://www.finsia.com/insights/news/news-article/2015/08/18/digital-lending-
revolution-the-battlelines-are-drawn
Hagberg, J., Sundstrom, M., & Egels-Zandén, N. (2016). The digitalization of retailing: an
exploratory framework. International Journal of Retail & Distribution
Management, 44(7), 694-712.
Holmlund, M., Holmlund, M., Strandvik, T., Strandvik, T., Lähteenmäki, I., & Lähteenmäki, I.
(2017). Digitalization challenging institutional logics: Top executive sensemaking of
service business change. Journal of Service Theory and Practice, 27(1), 219-236.
Johnson, M., & Verdegaal, M. (2016). How traditional banks are innovating the basics to provide
customers with an Uber-like mobile banking experience. Journal of Digital
Banking, 1(1), 33-44.
Mbama, C. (2017). Digital banking, customer experience and bank financial performance: UK
customers' perceptions. International Journal of Bank Marketing.

9DIGITALISATION OF CUSTOMER LENDING SERVICES
Reddy, S., & Reinartz, W. (2017). Digital transformation and value creation: Sea change
ahead. GfK Marketing Intelligence Review, 9(1), 10.
Watkins, R. D., Denegri-Knott, J., & Molesworth, M. (2016). The relationship between
ownership and possession: Observations from the context of digital virtual
goods. Journal of Marketing Management, 32(1-2), 44-70.
Yuksel, A. N., & Sener, E. (2017). The Reflections of Digitalization at Organizational Level:
Industry 4.0 in Turkey. Journal of Business Economics and Finance, 6(3), 291-300.