For example, over the COVID lockdowns, business lending in the EU increased by an average of 5.3 per cent, with banks struggling to keep pace with the steep increase in demand. With a recession looming we can expect another increase in business loan applications and financial institutions need to be prepared.

Over the coming months, lenders will need to move fast to process these increasing loan applications. But not all will have learned the lessons of the pandemic and invested in the digital infrastructure that allows them to scale and pivot at pace.  The laggards need to move now, employing up-to-date technology and automation solutions so they can work faster and more efficiently. Otherwise, customers will vote with their wallets and look elsewhere for their banking needs.

The cloud’s silver lining

The first step for banks looking to boost digital innovation is a shift to the cloud.  Today’s customers expect banking processes to be as easy and efficient as online shopping. This can only be achieved through the scale and agility provided by cloud technology. 

Cloud computing provides lenders with secure and agile infrastructure on which they can more easily streamline business processes, deploy new solutions and enable innovation to meet the speed at which customer expectations evolve. For banks looking to ready themselves for an increase in loan applications, cloud infrastructure will let them automate many parts of the customer journey, from application and KYC, through to approval and account management. For example, Cynergy Bank’s use of identity verification automation through its cloud-based platform cut onboarding time from three days to 54 seconds.

Another benefit of using cloud-based systems is the ability to scale more easily. Traditional banks’ legacy architectures make continuous evolution more difficult, as upgrading hardware is often both time-consuming and expensive. In contrast, cloud technology, often used by neobanks, is far nimbler, with the concept of growth an inbuilt characteristic. 

Keeping pace with the customer

Customer-centricity should be the ultimate priority for any bank, whatever the economic climate. It is no longer enough to be able to access banking amenities from your sofa, they need to be available 24/7 and easier to navigate than ever before.  

People say that television killed our attention span, but the pandemic finished off our patience.  

The good news is that, in the UK, banks have already invested in the cloud infrastructure to stay ahead of customer expectations. For example, Yorkshire Building Society knew that to maintain strong customer relationships it needed to move away from manual processes and allow employees to be more efficient. A shift to the cloud has enabled the organisation to become 90% paperless with staff spending less time searching for information on spreadsheets and more time accelerating customer service. This change has seen the Commercial Lending Department reduce the amount of time it takes to produce offer letters and facility agreements for customers by 75%.

Similarly, Santander UK has been able to use cloud computing and digital tools to stay ahead of customer expectations. Technology investment has enabled faster loan origination and decisioning, ultimately improving the overall customer experience.

This speed of service will be critical as banks scale up to better support customers over the coming downturn. However, it is not too late for those who have not yet embarked on the digital journey. Cloud solutions can be seamlessly implemented within a short period of time; start now and you and your customers will soon reap the rewards.

About the author: Thomas Chaplin is Head of Mortgage Product at nCino, EMEA.