Is Artificial Intelligence (AI) the secret to automation and growth

What Is Artificial intelligence (AI)?

Artificial intelligence (AI) is used in various aspects of our lives and every day we are surrounded by companies, technologies and devices that use AI. You unlock your phone using face recognition, social media personalises your feeds, spam emails are filtered from your inbox and banking systems determine if your latest purchases are fraudulent, not to mention ChatGPTs disruption of how we interact with AI. What may have until recently felt new, exciting and progressive is now becoming the norm, and 2023 will go down in history as a pivotal time for AI.

Financial Institutions, Central Banks, FinTechs and Payments providers globally had no option but to move operations online quickly to keep up with an ever-changing world. Digital is the new operating model and AI holds the key to success in the financial sector. Large banking and financial institutions recognised the advantages of AI early on and have successfully implementing the technology for various purposes.

Revolut use machine learning to protect you from fraud, leveraging vast amounts of payment data to identify abnormal activity which deviates from users usual behaviour.
Erica, an AI employee of the National Bank of America is a digital financial assistant and has already served over 7 million customers and handled over 50 million queries.
MyBank has lent to over 16 million small businesses in China using its AI powered 310 model, 3 minute application online, 1 second decision and 0 human intervention.

Methods of Artificial Intelligence

Machine Learning is the main driving force behind AI. In simple terms, Machine Learning takes large amounts of data and learns to detect patterns. This enables it to predict future outcomes as well as reveal other insights about the data.

Statistical techniques are used to create an algorithm to parse data, identify patterns, translate those patterns into rules, and make determinations or future predictions.

It has the ability to detect trends and patterns from historical data that may be too complex or subtle for humans to identify or programmers to code. This ability to detect and analyse such data patterns or relationships sets AI-based algorithms apart from traditional algorithms.

AI Driven Lending

Banks, Credit Unions, Building Societies and non-bank lenders need to future proof their lending processes. Customers won’t accept anything less than convenient, secure and easy to use digital services. Millennials and Gen Z, in particular, prefer digital channels over physically going into a branch or phoning in, and already experience the speed and convenience of AI driven digital interactions in all other areas of their lives.

Lending at its core is a data problem, making it naturally suited for Machine Learning models and algorithms. Machine Learning gives lenders better insights into a borrower’s ability to pay by working with historical data sets and more complex calculations than traditional models. While traditional underwriting focuses on credit scores and income data, automated models can include a wider set of alternative data, leveraging Open Finance to automate data gathering and processing. Extra data sources provide more insight into people and businesses with established credit scores, but it can also be particularly useful for determining creditworthiness without a traditional credit history.

While most loan applications are reviewed by a human underwriter, some loans could be automatically approved or rejected based on thresholds set by the lender.

Practical applications of AI in lending include:

Faster acquisition and online application processes with automated data gathering, extraction and validation
Consistent, transparent and quicker decisions
KYC, ID&V and fraud detection, including identity fraud and document validation
Real time data analytics and forecasting for business processes

The Benefits of AI Driven Lending

The use of AI has a positive impact on the lender because it eliminates time and effort involved in origination, onboarding and underwriting. Automated machine learning models assess the borrower’s risk faster and more accurately. Online loans enable greater self-service for the borrower, and applications processed in a matter of seconds instead of days, with the help of AI driven solutions.

At Luna Connect we believe the future of financial services for organisations of all sizes is frictionless digital experiences, and online growth demands faster, better decisions. AI is the key ingredient in achieving this future and is the core of our software platform used by financial services companies to efficiently grow online while reducing operational costs.

Where do I start?

AI, automation and other forms of digitisation may seem overwhelming at first glance. The complexity lies in how to make digitisation a reality in a traditional organisation without any external standards to measure how well you are performing. At Luna Connect we have developed a free tool to help you plan your automation journey, check out our lending automation assessment to find out how you can start your own journey BENCHMARK YOUR LENDING OPERATION USING THE 6 LEVELS OF LENDING AUTOMATION

Our CEO Brian D’Arcy talks with Todays Bankers Digest about Digital Transformation

Luna Connect’s CEO and Founder talked with Larry Grant from Today’s Banker Digest about digital transformation and financial institutions, discussing,

Key parts of digital transformation for financial institutions
Luna Connect’s approach and methodology for digital transformation
Benefits of adopting a digital transformation strategy

Use the link below to access the full interview recording to learn more, Today’s Banker Digest.

See Where You Stand With Luna Connect’s Exclusive Lending Automation Assessment

Automation and other forms of digital transformation may seem overwhelming at first glance for Community Financial Institutions like Credit Unions, Community Banks, and Non-bank Lenders.

The term ‘Digital Transformation’ has become a cliché, with software vendors and consultants beating the DT drum without defining exactly what it means or acknowledging that digital transformation comes in stages, rather than being a single event. It seems as though either you have digital transformation or you don’t.

See where you stand with Luna Connect’s exclusive lending automation assessment

From our experience working with local financial institutions, we have observed that lending automation comes in sequential stages, starting with totally manual processes and advancing through total automation without any human involvement.

To that end, Luna Connect is pleased to launch our innovative Lending Automation Assessment. This free tool enables lenders to complete an online set of questions from which we’ll determine the level of automation you are at today. We then will provide recommendations to get you to the next level of automation. If you are Level 2, for instance, we will explain what you need to do to get to Level 3. We can even provide you with a roadmap to get you to the highest level of automation that is reasonable for your organisation.

In our recent industry article titled, Benchmark Your Lending Operation Using the 6 Levels of Lending Automation, we define the Levels as follows:

LEVEL 0: No digital lending or automation capabilities

LEVEL 1: Digital loan application capabilities for borrowers, no automation for lender

LEVEL 2: End-to-end digital capabilities for borrowers, process automation for lender

LEVEL 3: End-to-end digital capabilities for borrowers, process automation and decision support for lender

LEVEL 4: End-to-end digital capabilities for borrowers, process automation and automated assessment and decisions, with human intervention

LEVEL 5: End-to-end digital capabilities for borrowers, process automation and automated assessment and decisions, with no human intervention

The end objective is not to have the highest level of automation possible, but rather to grow your loan book as cost effectively as possible while complying with banking regulations. Luna Connect can provide you with expert advice on how to navigate the automation process.

About Luna Connect

Often local lending institutions want to be online but don’t know how to go about it. Luna Connect has taken conscious steps to empower lending institutions by assisting them in their digital transformation journey from start to finish. Through Luna Connect, local lending institutions such as credit unions, banks and asset finance firms can leverage AI-driven insights, automate repetitive tasks, and provide a personalised customer experience in just a few weeks. They automate key aspects of the lending journey using our digital platform and provide AI-driven analytics for better-informed decisions and dashboards for performance. In addition, with Luna’s professional services division, clients can get started with customer journey mapping and ensure success with project implementation advisory services.

See more at www.lunaconnect.io

Using Luna Connect’s Technology Tools To Benefit Your Financial Institution

Digitise or fail. It’s that simple. Traditional banking methods are just not powerful enough to keep up with the demands of today’s digitally shrewd customers.

Keeping digitally current can be difficult, and expensive. It is easy to be intimidated by the sheer volume of options available, and it’s difficult to know which one is right for you and your business. Luckily, the experts at Luna Connect have compiled five innovative digital tools for your financial institution to use to ensure that you reach your potential, and skyrocket your growth, and unlike other digitisation plans, these tools are designed to make your life easier, and running your business much simpler.

Luna Connect Technology

Digital Tools

Luna Connect’s GDPR compliant Digital Tools are the perfect platform for online lending, onboarding and new account registration. In other words, Luna’s Digital Tools fully modernise your clients’ application process, by making it completely digital. It all happens online.

This gives your business access to many benefits, including rapid online access, a fully online digital experience that can be used from any device all over the world and the added benefit of an increased online presence without any capital investment. See short video on Digital Tools here.

Luna Connect Digital Tools

Marketing & Management Tools

Luna Connect’s Marketing And Management Tools integrate your marketing and lending data giving end to end visibility of campaign efficacy. Never miss an opportunity with better pipeline management from enquiry to decision. Keeping in contact with your clients has never been easier with automated communication and followup technology.

The Marketing & Management Tools provide you with more resources to find more customers in previously untapped markets, while a real-time AI lending platform helps your teams make better decisions, increasing workplace efficiency and productivity. See short video on Marketing & Management Tools here.

Luna Connect Marketing and Management Tools

Integration Tools

Knowledge is power. The more you know, the better off you and your financial institution will be. Luna’s Integration Tools allow you to quickly and seamlessly obtain the necessary banking data, credit checks, address verifications, and KYC to properly conduct business and reduce risk while providing your customers with an unparalleled customer experience. See short video on Integration Tools here.

Luna Connect Integration Tools

Cloud Tools

Luna Connect’s Cloud Tools are perfectly suited to managing the security, availability, and scalability of your financial institution. Our Cloud Tools enable secure remote access to data and processes, no matter where you are, and gives you a platform that encourages innovation and successful product launches.

Cloud Tools scalable architecture supports businesses of any size, and grows with your business, enabling you to expand freely. It’s also compliant with data protection legislation like GDPR by hosting data in your own region.

It also allows your employees to be more flexible about the way they work, onsite, remotely or in a hybrid model. See short video on Cloud Tools here.

Luna Connect Cloud Tools

Compliance Tools

Financial institutions are responsible for the security and safekeeping of the client and member funds.. This responsibility requires you and your financial institution to seek the best data compliance tools possible. Luna Connect’s compliance tools are state of the art, providing your company with powerful, certified end-to-end financial and data compliance processes that provide peace of mind with regards to security and data protection.

Trust is a commodity your financial institution cannot afford to lose, and thanks to Luna Connect’s Compliance Tools, you never will. Your clients will rest peacefully, secure in the knowledge that their financial data is in safe hands. See short video on Compliance Tools here.

Luna Connect Compliance Tools

Conclusion

In the 20th century, core banking software became a standard piece of infrastructure for all lenders. As the 21st century has brought us into a world of online banking, a digital lending platform has become just as important, if not more important, component to grow your client and member base as well as your loan book as a whole.

Announcing: Luna Connect’s Partner Program

Here at Luna Connect, we pride ourselves on our passion and affinity for creating mutually-beneficial relationships with all of our partners. In these partnerships, we help our partners build great relationships with their clients. To achieve this goal, we are thrilled to introduce Luna Connect’s partner program. The aim of our partner program is to help us expand into new markets globally and introduce the world to our innovative offerings.

At Luna Connect, both partnership and collaboration are top priorities. We partner with third-party technology providers, core banking, consultants and other experts to provide local and regional financial institutions and alternative lenders with best-in-class solutions and services. For example, Luna is partnered with consulting and implementation firm Next Wave Africa as its go-to-market partner for the African continent. Next Wave provides Fintech firms with instant access to the African market as well as consulting services such as customer journey mapping and project implementation and training. Luna is also partnered with tech firm Folio, who helps Luna Connect process Know Your Customer (KYC) with their sophisticated facial recognition biometrics software.

Why Partner With Us?

Partnering with Luna Connect means developing a mutually beneficial relationship with a company you can trust. You can expect to benefit in many different ways, including:

Your solution stack is improved by our technology

The Luna Connect Digital Lending Platform offers the most advanced digital lending solution for local and regional financial institutions.

New revenue, more stickiness

By implementing complementary technologies, you can create new revenue streams and improve relationships with your customers by growing even closer to them.

We understand your process and interests

Our significant experience in banking technology enables us to provide dependability, integration and speed.

Security

By using the latest platforms and frameworks, Luna Connect ensures that its systems are secure and not susceptible to cyber-attacks.

Financial institutions expect the right tools and a seamless user experience

Our compatibility with core banking and other technologies ensures seamless integration and personalised digital customer experiences.

How We Engage With Partners

At Luna Connect, we see a future in which our partner network thrives and provinces business development as well as professional services to each of our clients. Because Luna’s technology is so advanced, it has the advantage of being quickly and easily integrated with any of the services offered by our esteemed partners. Luna intends to provide product training and work closely with each of our partners to develop any required demos, proposals and scopes of work documents when needed. The professional services typically provided to our customers include digital assessments, online customer journey mapping, and project implementation plans.

Pricing Structure To Benefit Partners And Customers

Luna Connect’s pricing model is based on alignment with the digital transformation journey of a financial institution from a commercial and strategic perspective. With the design of our SaaS-based (Software as a Service) subscription model, our customers will see significant growth in their online businesses. Using Luna’s cloud-based infrastructure and SaaS, our clients have the benefit of not having to incur any costly capital investments. Digitally transforming operating models along the lines of Luna’s Digital Lending Platform exponentially reduces the cost and risk for our partners. As a result, a symbiotic model is created that keeps the right incentives in place, ensuring that the best commercial outcomes are achieved while improving your digital customer experience.

Why Luna?

It’s often the case that lending institutions have a desire to be online, yet they just don’t know how to get started. Throughout your digital transformation journey, Luna Connect can assist you. In addition to automating essential facets of the lending process, our digital platform uses AI to enable knowledgeable decisions and performance dashboards. Using our professional services division, you can commence with customer journey mapping and secure success with various project implementation advisory services.

Luna Connect makes your digital transformation journey simple with our innovative platform. You can expect advantages such as:

Identify pain points, create solutions and develop an implementation strategy by mapping customer interactions and internal processes.
Optimise your marketing budget by integrating marketing analytics with the loan application process.
Automating internal processes will reduce costs and speed up application processing.
With integrated KYC and ID&V checks, you can onboard new customers remotely.
Artificial intelligence and machine learning allow for better-informed decisions.
A visual representation of applications by stage, turnaround times, demographics, and trends.
Continual monitoring of KPIs to ensure the migration from offline to online is successful.

About Luna Connect

With Luna Connect’s digital lending platform, local financial institutions can enhance member and customer relationships and combine them with a personalised online experience. In just a few weeks, community banks, building societies and credit unions can provide digital lending experiences that imitate the amiable branch experience in a convenient online setting. What’s more, there is no capital investment!

In addition to our world-class digital platform, Luna Connect places great importance on staying abreast of the latest technologies and being innovators in our field. Our team has substantial experience in developing digital lending capabilities, including internal processes, customer journeys, onboarding, user experience and AI-driven analytics. While digital transformation journeys can be challenging, we strive to make them as uncomplicated as possible.

By partnering with Luna Connect, you are choosing to nurture a mutually beneficial relationship that will help you grow your business. You will also be assisted in fostering closer relationships with your customers with an individualised online experience.

If you’re interested in partnering with the Luna Connect team or would like to learn more, visit our website or contact us.

Using Digital Marketing to Grow Your Loan Book

Digital marketing, in particular social media marketing, is the best, fastest and most cost effective way to acquire new customers and to offer new products and services to your existing customers. Instagram, Facebook, Google, TikTok, YouTube and other social networks all provide digital advertising to consumers and businesses, but these platforms are different in many ways.

Facebook owns Instagram, but their respective user bases are very different. Facebook attracts older and Instagram focuses on younger audiences. Google is used by almost all of us, but their subsidiary YouTube’s users are more than 80% male. TikTok may seem like a teenage distraction, but they are the most powerful social network for Millennials and the GenZ crowd to such an extent that musical artists launch new music on TikTok, and if they go viral, they are successful.

Some financial institutions have resisted digital marketing, or don’t quite get it right. But it’s easier than it may seem, and it doesn’t need to ‘break the bank’, so to speak.

As a local or regional financial institution, it’s imperative that you ‘go digital’ to fend off large banks and their massive marketing warchests. Most major banks make it their business to drive costs out of their businesses. This often comes as a consequence of customer relationships and customer service. Branches are closing, call centres are understaffed, and often it seems impossible to talk to a human being when you really need to.

Conversely, credit unions and other local financial institutions have built relationships with families over a period of years, if not generations. There is a branch in your community. Somebody is always reachable by phone.

By adding digital marketing and digital communication channels such as Instagram and YouTube, and Instagram, local financial institutions have a clear advantage over major banks. There are four steps you can take to quickly acquire new customers using digital marketing tools:

Identify your target audience
Improve your customer experience
Use tailored messaging
Segment your audience

1. Identify your target audience

There is no greater waste of resources than pushing your advertising campaigns to the wrong people at the wrong time with the wrong product. Data-driven marketing helps brands avoid this by cutting through the clutter to reach the eyes interested in your product or service.

Moreover, once you have succeeded in identifying those online users, you’ll want to build a basis for acquiring them as repeat, loyal customers. The best way of doing this is by having insight into who those individuals are and to target them.

Instagram, Facebook, Google, and even TikTok know their audiences better than they know themselves. They know who is looking for loans, for example, and what they need the money to buy. Furthermore, they know the window for which they will be making a borrowing decision. The social media platforms know where they live, what they do for a living, and how much money they make. And this is just one digital channel. Email marketing is, generally speaking, the most cost effective channel for communicating with customers and subscribers.

By utilising social media, you can easily identify target audiences and grow your loan book.

2. Improve Your Online Customer Experience

Credit unions and local financial institutions have built strong relationships with communities, often spanning generations. After all, it’s human experiences that people hold on to – even cling to – especially in the Covid era. Sure, digital technology can handle transactional tasks better, cheaper, and faster than people can manually, but the human touch still matters. That’s why just 15% of US consumers bank exclusively with a consumer fintech.
Successful financial institutions of the future will effectively blend traditional relationships with digital efficiency, speed, and convenience. This is especially true when it comes to borrowing, which has more of an emotional component than, say, savings or investing..
The truth is, most major banks have outsourced so many processes and driven so much cost out of their business that, unless you are a high value client, their service levels have fallen dramatically. This is the opportunity for local financial institutions like credit unions to augment strong relationships with really great digital experiences. The secret is to always be customer centric at every step of the customer journey.

3. Use Tailored Messaging to Build Highly Targeted Campaigns

With highly targeted, unique campaigns consisting of personalised messaging for each customer, businesses can build solid customer relationships and a loyal customer base.

Organising your data will help you create all your content with greater intent for better engagement. With information about your customers’ interests, lifestyle, and online activity, you can craft content that they would like to see. Your messaging should be unique and consistent across your chosen channels to capture your audience’s attention and to position your brand as a reputable source. Tailored messaging will make you memorable over your competitors fighting for similar customer recognition.

4. Segment Your Audience

In the digital age, offering a personalised customer experience is achievable by segmenting your audience. Segmenting your audience tends to every interested pair of eyes at various stages in the sales funnel. As an example, perhaps several potential customers have not completed their applications; a friendly prompt to consider completing the purchase is appropriate targeted messaging at this phase.

Because your customers are at different stages of the buyer’s journey, you must craft separate messaging to help urge them forward. Personalization is another integral part of successful customer acquisition as it aids the automatic updating of customer data. Personalization also provides direction regarding which platforms are most suitable to yield the best possible results for your offerings.

How Luna Connect Tracks Digital Marketing Success

Your website analytics will tell you the ‘lead source’ of visitors to your website, for example, how many people came from Google, etc. Once the visitor arrives at your website, Luna Connect will tell you what happens once they are on your system. You will be able to see how many started a loan application, how many submitted, and every step in-between. With this data, your lending institution will be able to fine tune advertising spend by online channel to improve effectiveness and grow your loan book!.

Luna Connect Disrupts Lending Industry Incumbents

Legacy systems hold back local financial institutions from digitising and stifle innovation with outdated technology. Luna Connect combats this by staying at the forefront of technological advancements and delivering a digital lending platform cost-effectively with no capital investment.

Luna Connect goes beyond offering just another loan origination system (LOS). They leverage the cloud, AI, data analytics, automation, and other advanced technologies to disrupt the lending industry. Indeed, credit unions and community-based banks have something the big banks and startups may never have – close relationships with individuals, families, and communities. Now they have access to the technology that enables a superior digital customer experience as well.

Legacy systems rely on old, insecure software versions that make customer data difficult to access and vulnerable to cyber-attacks. Furthermore, legacy systems simply don’t have the infrastructure required for true high availability, scalability, and resilience.

Luna Connect utilises the Google Cloud Platform to ensure continuity and high availability by utilising multi-site replication and failover. Ensuring clients are always on the latest version avoids the security holes and other legacy system limitations. Cloud hosting and modern software development techniques such as agile, and DevOps utilisation enable rapid innovation and high-velocity delivery.

Furthermore, lenders have been accustomed to laying out large amounts of capital for technology, but it doesn’t have to be that way. Luna’s clients do not incur capital investment due to Luna’s Software as a Service (SaaS) model. This approach reduces the cost and risks of digitally transforming banks, credit unions, and other lending institutions.

About Luna Connect