With the progressive digitalisation, stronger competition and the fragmentation of the banking market due to the PSD2 legislation, we find that banks need to come up with new methods to attract clients. New, innovative, fully digital products are a solution that makes banks‘ access to customers much easier. Paperless loan, with money landing even on non-client’s account within 15 minutes, is an example of such innovation associated under our digital banking solutions platform.
The ease with which consumers tend to abandon their traditional providers and to migrate to new online services is a driving force that pushes brick-and-mortar banks towards embracing the latest digital trends and making them part of their offer. Such trends include innovative “paperless” methods of remote loans without actual physical contact with the client. However, online products require a different approach to client identification and verification than the traditional client service in brick-and-mortar branches.
Any potential client needs to see that the bank’s services are reliable and trustworthy, that client data are kept safe, that the environment is user-friendly and that each requirement is dealt with as quickly as possible. The bank must respect regulatory requirements such as strong client verification compliant with PSD2 and hassle-free client identification either through automated capture and verification of personal documents or through video-identification by remote video-access.
The fact is that the players who went online to communicate with their current and new clients, either through mobile applications such as multibanking or through the digital sale of banking services and products, have gained a significant strategic advantage on the market and a strong innovative point for their marketing communication.
What is a Paperless Loan?
The fully online “Paperless Loan” is one of Trask’s flagship projects. With our Paperless Loan, even non-clients are able to take out a loan from a bank in 15 minutes and fully online, without actually visiting the bank’s branch.
We worked with the EY Czech Republic to develop the Paperless Loan and to make it technically and legally compatible and compliant with the European market standards. We launched the groundbreaking, innovative loan on the Czech market in 2015 for Česká spořitelna (Erste Group). Currently, the fully online loan service is offered by two banks in the Czech Republic: the above-mentioned Česká spořitelna and ČSOB (KBC Group). The latter joined this year, again in collaboration with us and with the EY Czech Republic.
We were the first to implement “Paperless Loan” in Hungary in 2018. It was for K&H Bank (also KBC Group) and once again, we stood at the forefront of development. Launching a fully online loan on the Hungarian market that is bound by extremely stringent regulatory requirements was a true, widely discussed pivotal moment that caught K&H Bank competitors off-guard, unprepared for such an innovation. It was another evidence that Trask can do the (seemingly) impossible even outside its home market. Pushing the borders of what is possible from the perspective of technologies and regulation has thus become our strong competitive advantage at the European level.
Online loan for non-clients is a typical example of the innovative approach banks may apply to acquire new clients. Both Czech and Hungarian customers are rather conservative and largely unwilling to change their bank of choice. Thus, it is easier for a bank to tie with a non-client through a single product and then move ahead to sell other services. What are the specifics of the two innovative projects and what is their shared background?
How we implemented the Paperless Loan for non-clients in Česká spořitelna
Česká spořitelna (Erste Group) is the largest bank on the Czech market. Its leading position is well deserved, taking into account the bank’s strong focus on innovation and on making life as easy as possible for clients. In 2015, Česká spořitelna management decided to launch a highly innovative product for potential clients wishing to borrow money easily and quickly, without unnecessary paperwork and without actually visiting the bank’s branch. The aim was to develop a loan that would bring utmost user comfort and an extremely simple and easy-to-follow process from application to money transfer, with scoring running at the background, thanks to which the customer would know instantly whether or not they would get the money.
Working with the EY Czech Republic, we developed a product called “Paperless Loan”. It is targeted at non-clients and allows them to borrow money fully online. No waiting, no paperwork, no personal visit to the bank’s branch – and the money arrive on the account within 15 minutes from approval. With our Paperless Loan, the bank has gained a new acquisition channel to attract more clients while the costs of loan services went largely down.
We delivered the innovative solution in record time (six months from implementation start to the product “go live”), thanks to a combination of our know-how, unique data analysis technologies, scoring algorithms, and the use of pre-prepared components previously developed by us.
Paperless loan for K&H Bank clients and non-clients in 2018? First in Hungary, thanks to Trask!
Hungary’s K&H Bank, part of Belgium’s KBC Group, ranks among the largest banking institutions in Hungary. In 2018, we delivered to K&H Bank a “paperless” online loan based on the same system that had been running so successfully in Česká spořitelna. In Hungary too, our paperless loan was the first fully online product of its kind on the market. The project was driven by the idea of making K&H financing easily and readily accessible to K&H’s own clients and to competitor banks’ clients, from the comfort of their homes, without the need to visit the bank’s branch, without having to wait for delivery of documents for signature, and with loan approved and money landing on the account in 15 minutes.
The Hungarian market, however, is rather conservative and banks are facing various issues when it comes to acquiring new clients, because people in Hungary tend to lean on tradition. Wherever they open their first account, they stay. With this in mind, K&H Bank has offered them a cheap and simple loan without asking them to change their bank of choice.
In K&H Bank, the process of applying for a loan is divided into five simple, easy-to-understand steps and the client only needs a computer with a web camera and internet access. Unlike in the Czech Republic, where the process is fully online, Hungarian legislation requires that client identification is carried out through video. Video identification is provided externally by Facekom.
Throughout the implementation process, Trask and K&H Bank had to work very closely with supervisory and regulatory bodies, because the extensive innovation of such importance was subject to meticulous scrutiny. K&H Bank Paperless Loan was a pioneering product and as such, it has opened the way for other innovative digital products in Hungary. And what is more, it is completely outsourced and running in the cloud.