The Power of Digital Lending Platform

Table of Contents:

Key digital lending platform benefits
Best practices in Digital Lending

Online lending is gaining popularity all over the world. This is not surprising – continuous digital transformation of financial services becomes a prerequisite for sustainable growth in the sector. This trend leads to growing demand for the enablers of this service – digital lending platforms. The market size for these solutions surpassed USD 8.5 billion in 2022 and according to the new research report, is set to reach USD 59 billion by 2032, according to a by Global Market Insights Inc. – a compound average growth rate (CAGR) of 20.5%.

Total experience (TE) becomes another major driver of the digital transformation. TE is a combination of customer and employee channels, including digital channels (such as website and mobile app) and physical channels (such as branches and call centers), into a single one with a consistent experience. To provide a great TE, businesses need to have a better understanding of their customers and their needs and use the latest technologies, such as AI, to personalize their products and services. This is where modern digital lending platforms become essential. This is a powerful tool for improving TE by providing borrowers with greater simplicity, radically shorter time to decision, and convenience, while offering a trove of data for both lenders and businesses to help them personalize existing products and develop new ones.

Key digital lending platform benefits:

1.Increased visibility and new channel for client acquisition

Digital lending eliminates geographical obstacles that often become a natural barrier to a bank or credit union’s growth from accessing a larger audience. It allows for digital loan origination. Borrowers may apply for loans online, sign agreements on their phones, and scan checks without leaving their homes. This is a customer benefit that financial institutions may utilize as a value proposition to attract new clients.

Similarly, the digital transformation increases the available pool of lenders from borrowers’ perspective. Broader market and additional data that comes together with a digital application (e.g. patterns recognized by the AI) improve outcomes for both – allowing for both lower rates and lower risks.

2.Increased speed and convenience

Borrowers can complete an application when it is convenient for them, and time-to-decision reduces drastically. In some cases – such as in fully automated mode powered by AI – time from submitting the application to receiving funds can be measured in minutes.

Digital lending platforms such as CompassWay have a multi-product lending system that will help to retain customers because they no longer need to look for other lenders for their needs – everything is in one place.

3.Perfect for first-time borrowers

A digital lending platform is more convenient for first-time borrowers. They are generally young people who are tech-savvy and conduct all of their business on their cell phones. The digital platform simplifies the loan process by providing user-friendly features that require little human input.

Modern loan origination systems offer a better user experience with a smarter interface that lets clients move through the process without needing much guidance. In fact, loan applications can be done in an app in their smartphones.

4.Reduced costs

A digital lending platform that decreases costs by 30 to 50% by saving employees’ time, reducing cost of new clients acquisition and increased rate of repeat clients, as well as reduced need for brick-and-mortar investments. Borrowers save time and money too.

5.Personalized service

Digital lending platforms that utilize AI can pick up patterns of borrowers’ behavior and allow them to personalize both financial services and promotional strategies for the goods and services being financed.

Banks and credit unions can create customer journeys that are unique. Lending platforms such as CompassWay allow the design excellent customer journey using reusable building blocks, giving complete freedom and flexibility.

Organizations that will succeed in digital transformation will win the future, and digital lending platform is an essential element for such transformation in finance.

Best practices in Digital Lending 

In today’s highly mobile economy, many organizations face the challenge of having an outdated credit delivery system that is unable to meet the growing needs of consumers and their minimal expectations every day. Trying to provide the best level of customer experience and productivity, despite the separation of channels, is without a doubt completely one of the most frustrating difficulties that an enterprise is faced today almost on a daily basis.

Using a cloud-based lending platform has several important advantages over other off-the-shelf software that can take weeks or months to implement in an organization. In addition, a cloud-based solution can improve lending efficiency without disrupting operations. This approach also streamlines the transition and allows to gradually upgrade the business processes.

Lenders can produce more loan applications in less time with more accuracy thanks to automation on several levels, including faster verification and underwriting utilizing ML-based predictive models. This translates into more earnings, a larger client base, and a wider market.

1. Functionality of automated underwriting  

Credit is at the heart of most customer relationships, and digitizing it offers significant advantages to banks and customers alike. For the bank, successful transformations enhance revenue growth and achieve significant cost savings. McKinsey reports that one large European bank increased win rates by a third and average margins by over 50 percent as a result of slashing its time to yes on small- and medium-enterprise (SME) lending from 20 days to less than ten minutes, far outpacing the competition.

According to McKinsey, “Success means much faster credit decisions, with [accountholders] getting cash up to 80 percent sooner; lower costs, with 30 to 50 percent less time spent on decision making; and better-quality risk decisions, which translate into greater profitability down the road”

2. Fully digital processing

The digital lending platform allows you to quickly issue a loan with zero paperwork and no face-to-face interaction. Faster loan approvals and releases will reduce the “time to yes” from weeks to minutes – this will provide you with a constant flow of satisfied customers and a lower cost of loan processing.

McKinsey analysis suggests that an average European bank could capture as much as $230 million in annual profit, of which just over half derives from cost efficiencies (such as less “touch time” and lower cost of risk), and the remainder comes from revenue gains (increased applications, higher win rates, and better pricing).

CompassWay is an all-in-one lending platform that automates the loan origination process from application to funding, delivering a best-in-class experience for your clients and team – for any loan product .With advanced algorithms and analytics, banks can quickly score clients and automatically make credit decisions.ct, anywhere in the globe. By reducing time and costs both during the origination and portfolio management stages, a bank or credit union becomes more productive and has more room to develop new business.

3.Real-time checks: ID verification, Know Your Customer (KYC), Anti-money laundering (AML), credit history 

Digital lending software is equipped to synchronize data from KYC registries, credit bureaus, banks, etc. to ensure that all uploaded data and documents are authenticated. Decision rules and underwriting algorithms are then used to determine whether the loan application passes the checks and balances of risk.

Increased automation and strong back-end technology enable staff to be redeployed from reviewing loan applications to work that adds more value.

4.Real time risk profiling 

Risk management is a most important aspect of a digital lending platform. The capacity to mitigate credit risk will prevent costly losses and preserve credit availability for deserving borrowers who will become or remain active participants in the economy.

The digital lending solution should give you real-time insights into borrowers’ creditworthiness based on their credit scores.

It ‘s also crucial to have a customisable scorecard based on recent cash flow information, total debt level, repayment history and other factors.

Both the internal and external data sources  are used in a credit decisioning model and have an impact on the quality of credit decision. The use of objective financial information and other factors proven to correlate with risk allows for increased consistency across each company’s lending  underwriting process. The use of risk-based pricing has allowed lenders  to better serve consumers across the risk spectrum. Under this system, costs are lowered for the majority of consumers who are deemed low risk, while credit opportunities are expanded for higher-risk consumers. Risk-based pricing also creates a fairer marketplace.

With the help of artificial intelligence (AI and ML tools) financial companies can better identify specific variables to define new customer segments, creating segmentation rules, building and validating dedicated  scoring models, and improving predictive power. The proprietary AI-driven technology of deep neural networks and machine learning allows making decisions about loans within 30 seconds. CompassWay’s AI model analyses over 400 variables collected during the application process and sourced from third parties – ranging from credit bureaus to social networks.

5.Automate Marketing and Client’s Loyalty Program

A strong digital lending platform should provide you with critical analytics to help you make informed decisions. For example, the platform should provide you with information about client acquisition channels ,time  applying for loan or  cross-device tracking.These insights assist you in identifying and correcting issues in your onboarding process in order to attract more qualified  borrowers to your financial institution.

The  digital lending platform should help you with  getting  return customers in your bank or credit union. CompassWay’s digital lending platform displays  personalized loan recommendations to existing borrowers to expand the possibilities of making them repeat customers.

Notifications, SMS, email, or personalized nudges — provide your marketing teams the tools they need to create targeted campaigns and outreach that engage customers and members, resulting in long-term loyalty and stickiness.

The digital lending technology also makes perfectly clear loan applications for return customers by automatically pre-filling forms with existing client information. The result is improved customer experience and higher retention rate.Orchestrate your digital sales funnels to guarantee the relevant questions, steps, and experiences are presented to your customers at every digital touchpoint.


In finance, a successful business and satisfied customers require modern digital lending platforms such as Compassway.

This highly automated cloud-based money lending system streamlines the loan application process while protecting confidential data. As a result, moving to a cloud-based management system that includes state-of-the-art security capabilities will ensure better business development for lenders. If you’re looking for a digital lending platform that can help your business to grow, reach out to Compassway to improve your loan process. Book a demo and check a free trial to see how the platform could benefit your business tomorrow!


Valentina Zhukovska Compassway

Financial sector professional, combining the knowledge of large-scale bank operations and cutting-edge fintech technology.  Main professional  areas are the transformation of the traditional banking operations into the digital bank and extending this access to banking services to unbanked and underserved clients.

Anna Breus  CompassWay

Anna is a proficient software QA Engineer ,with a creative approach to verify and validate development fintech products that bring real value for Company ‘s  clients .