Lending 2.0 – Digitizing End to End Lending Process (Interview with Susan Perlmutter from REPAY)

In this episode we sat down with Susan Perlmutter, the Chief Revenue Officer at REPAY to discuss the latest innovations in the lending industry, that every lender must know about.

In today’s environment, lenders must position themselves as a financial partner for borrowers, and serve their needs on their terms. A big part of the puzzle is the digital transformation that has been accelerating in the financial sector. Today, every part of a lending business has a borrower-friendly digital solution, from loan origination and marketing to funding and collections.

In this interview, Susan explains what she is seeing in the financial sector, and how new-age lenders must keep up with the times to succeed in the short and long term.

REPAY is an innovative company that has a long history of helping financial institutions and lenders improve their businesses and serve their customers better, faster and more efficiently.

For more information about REPAY, visit their Smarter Loans profile.

Interview Transcript:

Susan: Hello, my name is Susan Perlmutter. I’m the Chief Revenue Officer for REPAY. Today i’m doing an interview with Smarter Loans.

Vlad: Susan thank you very much for joining me today. So I want to dive right in and let me ask you first…right now there is a digital transformation happening virtually in every industry…businesses of different sizes, different sectors…you specialize and your company REPAY specializes in the financial sector and the lending industry as well; can you tell me what you’re seeing in the financial industry and how financial companies are adapting right now to what’s happening in the world.

Susan: Sure listen that’s uh that’s a great question you know digital transformation I think used to only apply when people thought about offering a loan application online, and really digital transformation has a place in every aspect of the lending business not just the online application. I mean today lenders are scrambling to implement technology to fill in the gaps. While lenders have taken the very first step to collect the application online they’ve not done a lot to plan for how to support that approval and then the the funding and the collection of that loan after it has been originated through a digital process that really could support that loan process from end to end. Every single step of the loan process today has a piece of technology, a digital component that can support that process: collecting the application, approving the application, communicating that approval to the borrower, funding the loan, and then actually setting up that first payment to start servicing the loan can all be handled in a digital format that is a very friendly borrower experience. And then digital products can go a long way to establish really good collection processes for a lender after the loan has been originated. All of these methods are very borrower friendly and borrowers have gravitated to these methods in a retail setting so it just makes sense for them to start gravitating to them during the lending process.

Vlad: For a lender that is not currently leveraging a lot of this technology, how quickly can this all be set up so they can adjust?

Susan: Most FinTech companies have what we call kind of a shrink wrap product to get someone up and going within about a 30 to 45 day process if the lender is ready to move that quickly. There is a lot of planning that needs to be put together to understand the vision of the lender and what their vision is to their to their end customer, what they want to look like digitally to their end customer.

Vlad: When you look around and what’s happening in the world and in North America the general consensus is that the economic recovery is expected to be a long term and a slow dragged out process and the impact is really happening on so many sides of a business, from sales and marketing to servicing consumer client retention and so on so forth. So when you talk about timing and things that are really urgent what are some of the things that lenders should really focus on as a priority and adapt without any delay?

Susan: That term “the new normal” i think was coined for a very good reason. We I don’t think are going to rubber bands snapback to the way things were earlier this year. Lenders need to fast track their decisions to implement digital solutions to be able to support their borrowers and to grow their business in the future. I don’t think we even know what stable is going to look like. Is stable when all the service industry is ready to go back to work? We really don’t know when stable is going to occur so for lenders to implement ways to communicate with their customers in a non-face-to-face manner, there is no time to waste to put these products in place.

Staff and borrowers are going to be very reluctant I think to come back into branches and offices where they’re sitting close to an individual, trying to get through the loan process. They have in the last 60 days become very accustomed uh to either working from home or doing their business from home and so these consumers who might not have been used to doing their business online surely have been forced into that over the last 60 days and because the consumers have been forced into that, businesses need to be ready to meet those needs and provide communication channels to those consumers so they can adequately communicate with their potential customer. And then after the customer becomes a borrower how to make sure that borrower feels supported when they cannot meet their lender face to face.

The way that you attained a credit line was to walk in face-to-face, establish a relationship and then that that banker became a lifetime relationship. Today alternate lending is a competitive market and so consumers can sit at home online, look at different rates compare lenders one against the other, not only in rates but also in the tools that the lender is giving the borrower after the loan in order to sustain the loan and to keep the relationship close even though they may not have that face-to-face relationship as they used to with the traditional banks.

Vlad: There are probably savvy companies and lenders out there and financial companies that are also saying you know what i’m going to take this time to actually showcase what i bring to the table that’s different in the industry so that when people and borrowing and the industries are rebounding, these lenders and these companies will be in a better place to succeed and attract customers.

Susan: I think lenders need to think of themselves and position themselves as a financial partner to their borrower, to really meet their needs on their terms. Consumers, people for the most part are very non-confrontational so giving them self-serve methods to talk about how much they earn if it’s not a lot and they may be embarrassed about what they earn, and have to come and ask for for credit, giving them the ability to negotiate payment terms in a non-confrontational way through technology I think is going to give a lender the ability to set themselves apart from a lender who does not provide those same tools for that that consumer to have that safe warm fuzzy place to come in and transact business. When they’re sitting at their kitchen table uh trying to understand how they’re going to come up with some funds maybe for an emergency or a special purpose, where they really need some lender to step up and meet a need.

Vlad: Susan right now i think it’s clear that within the financial sector and in the lending sector companies that are going to emerge on the other side of this in a successful way will probably find themselves to have some adjusted processes internally and externally. But let’s talk about a brand new lender, a new age lender that is setting up shop in the post-COVID economy. What are some of the must-have qualities that a brand new lender must have and must consider to operate successfully in the post-COVID world?

Susan: That’s a great question and something I love to talk about. So we hear the term omni channel, which is a strategy that has been adopted to allow multiple touch points, multiple self-serve touch points for borrowers to be able to transact business with the lender. And again that that is everything from initially receiving an application filling out the application all the way to setting up that first payment. If a new lender has not thought about that landscape and how they look to a consumer without the consumer standing on their doorstep then they’re really going to be missing the boat because consumers are not going to have the luxury i don’t believe of shopping outside their homes for a very long time. Whether or not our governments allow us to walk outside i think the apprehension that has been caused over these past months is going to cause consumers who never have shopped online before who have never picked up groceries on the curb now to call that their way of life and so if a new lender is not thinking about digitizing every single piece of that loan process, understanding they may never see or never talk to that customer other than digitally then they’re going to miss out on the opportunity of that customer who only transact digitally to come to their doorstep for a loan.

Vlad: So what i’m hearing basically is they must be able to communicate in an effective way and they must be able to service the customers from acquisition and using the right marketing methods to delivering the service and communication with customer support and even retention, communicating with the customer perhaps when they have already paid off their loan and just maintaining contact. Leveraging technology will be a key theme and putting that at the front of the mindset for anybody who’s going to be setting up shop afterwards is going to be important is that right?

Susan: Absolutely and i think you know it’s not a one-size-fits-all um for a consumer in the way that they like to communicate so you know there are all kinds of products out there that provide great communication touch points for that lender to communicate with the consumer before during and after the loan. Push messaging through mobile apps, texting messaging including text to pay, 800 numbers, IVRs where consumers can call in and receive balance information websites that can negotiate a smaller payment or a skip payment in a schedule. All of those channels those communication touch points, getting back to that omni channel experience, are going to be necessary because it’s not going to be just a website that is going to meet the needs of the consumer portfolio, the group of consumers that are going to want to do business with the lender. So that that brand new lender really needs to think about it needs to be more than just a website with your name on it, it really needs to be an entire package of reach out communication, inbound and outbound. How are we going to communicate with the borrower if we’re not able to touch them.

Vlad: As people are shopping from their homes more not just for daily consumer products but also for financial products being able to properly represent yourself as a brand, as a financial brand is going to be more and more important. Your company REPAY has a long history of helping financial companies and specifically lending companies by making payments processes much more efficient and in particular lately you’ve had an increased interest in your VISA Direct product. Can you explain for our audience what the VISA Direct product actually is and why there’s been a spike in demand for this product.

Susan: The VISA Direct product actually will allow a lender to push funds into a consumer’s debit card that is sitting in their wallet today. 24 hours a day ,seven days a week weekends and holidays included. This allows a lender to fund the borrower at the exact time the borrower realizes they need the funds. It really is going to change the way consumers expect to be funded. Right now one day is the best really we can do with an EFT and one day on a weekend is a three-day weekend from Friday to Monday so it really just doesn’t meet the need of the ‘new normal’ consumer any longer in the way that we used to fund.

This product is a game changer. if i’m a consumer looking at lenders and comparing those lenders one to the other and it’s Friday night and i need those funds on Sunday certainly i’m going to gravitate toward a lender that is able to put those funds in my hand Friday night versus having to fill out an application even if it’s online get an approval and maybe wait till Monday or Tuesday when the emergency or need might have already passed. It is probably the number one product that we have deployed in the year 2020 and specifically because of this pandemic. We had been in conversations for months and months with some lenders and within a matter of days had implemented this product and certainly turned around their entire lending structure from live checks and cash into this VISA Direct product. I think we’re going to find multiple uses for this product not just in lending but it will find its way into other businesses as well.

Vlad: Susan i want to thank you on behalf of myself and our entire team here at Smarter Loans for joining us today, for sharing your insights, and i hope you have a wonderful day.

Vlad Sherbatov

Vlad is the President and Co-Founder of Smarter Loans, Canada's original and largest loan comparison website. He is a passionate entrepreneur and business leader in the Canadian financial sector. He was selected as a 2019 Top 25 Leaders in Lending by the Canadian Lenders Association. Vlad is an author at Smarter Loans, and has been featured in publications like the Toronto Star and National Post, among others.