Does Your Bank or Credit Union Have Digital Lending FOMO? It should!


FO·MO /ˈfōmō/

Informal noun

An acronym standing for ‘fear of missing out,’ used to describe the uneasy and sometimes all-consuming feeling that you have been left behind — that your peers are doing, in the know about, or in possession of more or something better than you. 1


Thanks to the rise of social media, FOMO affects all of us to some degree, whether we want to admit it or not. From secretly coveting a friend’s opulent vacation to doubting our parenting skills, it’s normal these days to periodically question our decisions and our worth based on the apparent successes of others. FOMO, taken to the extreme, can lead to increased levels of anxiety and self-doubt.2


For financial institutions, however, FOMO can serve as an effective motivator for improvement as you evaluate your bank or credit union’s products, services and consumer satisfaction in relation to your competition.


Take digital lending technology, for instance. Digital lending is the end-to-end, cloud-based technology that automates the entire lending process—from application and underwriting to set up, review and renewal—that allows your financial institution to provide consumer and small business loans more efficiently.


You are right to feel some anxiety if your FI does not offer it, as the number of other banks, credit unions and fintech companies that do are growing every day. What’s more, these companies are pilfering your account holders, who increasingly expect their financial institutions to provide digital options, and actively seek out companies that do.


Here is a list of reasons FOMO is real if your bank or credit union does not offer digital lending technology:


  1. Missed Savings/Income (ROI)


Without digital processes, the cost to underwrite a small business loan using traditional paper-based processes is approximately $3,000 to $5,000 per loan,3 rendering these loans, which are typically less than $500,000, unprofitable for most community institutions. However, using automated, data-driven underwriting technology reduces that cost to about $600 to $900,4 providing a savings of $2,000 to $3,000 per loan!


To further illustrate the potential economic impact of digital lending technology, the American Bankers Association (ABA) found that financial institutions that use traditional loan processes have operating expenses equivalent to six cents for every dollar in outstanding loans, compared to two cents for alternative lenders that process their loans digitally.5


With digital lending, your FI has the ability to process small business loans more efficiently and in a much more cost-effective manner resulting in more revenue, higher margins and increased profitability.


  1. Missed Efficiency


Loans originated and processed using traditional paper-based methods require about 28 separate manual tasks, compared to only nine when using digital technology.4 Not only does this newfound efficiency translate into savings and profitability, it significantly improves the overall consumer experience. Borrowers can go online, fill out an application, upload documentation, e-sign paperwork and even invite their co-owners to the secure portal. The platform provides almost instantaneous decisioning capabilities, while also consolidating all of the disclosures and forms necessary to finalize the loan.


With this streamlined process, on average, borrowers receive the funds they need 80 percent faster, and your bank or credit union spends 30 to 50 percent less time on decision-making.6


Digital lending technology also significantly reduces the time and resources your FI spends on loan reviews and renewals, which notoriously require an inordinate amount of manual effort to collect the pertinent information and input it into the loan system.

Automating the renewal and review processes—by scanning tax forms and auto-populating the system with financial data, for example—can reduce the time required from four to six hours to only 30 minutes4 and reduce costs by as much as 50%.4


These increases in efficiency also allow for more effective allocation of resources such as loan officers, who no longer spend as much time shepherding deals through the loan process. For instance, your loan officers would now have time to be out in the community, meeting with small business owners who may not have time to come to your location. Your sales team could start the loan process immediately online at the business site and complete it there or later as needed.


Additionally, as applications come into the platform, your financial institution can determine the right person to engage the business borrower, when necessary. This enables your institution to keep your sales team focused on growing your loan portfolio, creating better relationships and retention, and generating more cross-sell opportunities.


  1. Missed Account Holder Engagement & Growth


Serving borrowers with digital product offerings is no longer an option; it is an imperative in order to retain and gain account holders. Your customers or members are actively seeking digital interaction with your bank or credit union, and if you don’t offer it, many will find an alternative provider.


In case you’re in doubt, these statistics tell the story:


  • 80% of small- to medium-size businesses say their research process for securing credit begins online.7
  • In the next three years, the number of adults worldwide who will access financial services digitally will increase by 53 percent.8
  • 68% of retail financial services consumers say they prefer to get a consumer loan via digital channels.9


And perhaps the most compelling:

  • Over half of consumers said they would use fintech services through their financial institutions if they were offered.10

Digital lending technology facilitates customer/member acquisition, as your financial institution is able to offer more attractive rates with the inherent operating efficiencies of technology coupled with your low cost of funds. Additionally, the technology allows you to analyze account holder data to identify creditworthy borrowers and engage them with targeted communications at just the right time.


Digital lending technology ensures your FI meets the demands of an increasingly digital society and helps safeguard and grow your account holder relationships. The technology streamlines processes to increase revenue and profitability and enhance the consumer experience.

With success like that, digital lending FOMO may be real, but once you get onboard, it’s only SEP (“someone else’s problem”).







4 Akouba by Velocity Digital Lending Platform Internal Data

5 ABA study, Community Bank CEO Priorities for 2018


6 McKinsey & Company (Aug 2018)



7 2017 McKinsey’s Small Business Banking Panel,


8 The Financial Brand,


9 Oracle Report, New Digital Demand in Retail Banking, 2018.


10 ForeSee Experience Index: Banking Report, 2017.