Looking to Modernize Your Banking Ecosystem? These 5 Key Factors Will Come in Handy

Modernize Your Banking Ecosystem

The global banking industry is undergoing a significant transformation driven by technological advancements in artificial intelligence (AI), machine learning (ML), and generative AI (GenAI). Today’s customers expect prompt resolutions, digital-first experiences, faster loan approvals, and a seamless, automated banking journey.

To understand the evolving financial landscape, Newgen recently hosted a dynamic panel discussion, titled ‘Modernize Banking with Seamless Customer Onboarding and Digital Loan Origination Journeys.’

The discussion was joined by a power-packed panel, including Pete Peterson, Chief Retail Credit Officer at United Community Bank, Keith Sexe, Vice President at BankMidwest, and Greg Sullins, Head of US Banking COE at Newgen. The engaging discussion was moderated by Isabella Brennan of the Consumer Bankers Association.

The powerhouse of panelists presented a rich amalgamation of perspectives on several issues that concern the banking leaders. The discussion brought forth remarkable insights that can help banks transform into game-changers in the industry.

Here’s a quick snapshot from the insightful discussion:

30-minute Loan Disbursal: A New Normal

A competitive lending ecosystem and evolving customer expectations make it crucial for banks to create a frictionless lending experience. In a June 2024 conference, McKinsey experts stated that an efficient digital lending process will result in cost saving, better quality of debt portfolio as well as higher customer satisfaction. While faster turnaround matters for consumer credit, simplifying the complex processes will boost the commercial lending business.

While announcing United Community Bank’s October go-live with Newgen’s AI-driven Loan Origination solution, Pete stressed that the upgrade would allow the bank to book and disburse loans within 30 minutes—a task that previously took three days. By centralizing all data within Newgen’s adaptable and future-resilient solution, the bank can accelerate its time-to-market and significantly enhance operational efficiency.

PDFs: The Hidden Bottleneck in Bank’s Journey Towards Digital Transformation

Manual dependency can hinder growth and slow down the bank’s automation journeys. Financial institutions have shifted their focus to creating user-friendly interfaces and automating data management systems to enhance scalability, speed and accuracy.

During the discussion, Keith of BankMidWest highlighted how PDFs, despite their convenience, can complicate digital processes. He explained that manual handling—such as filling, scanning, emailing, and re-entering data—creates roadblocks, slows down operations, and makes scaling difficult. The reliance on isolated systems further exacerbated these challenges, ensuring that true digital transformation requires fully automated solutions that can seamlessly integrate with the banking’s core infrastructure.

The Game-Changing 15-minute Account Opening Process

Empowering banking customers to open online accounts within minutes plays a significant role in minimizing abandonment and boosting growth. A survey by Deloitte found that over 50% of the mobile banking users wanted a faster account opening process. It also stated that consumers want banks to use the existing information to accelerate the process up and cross-sell relevant products to them.  In the age of instant gratification, onboarding customers in minutes will be a key differentiator. An article by The Financial Brand mentioned that digital account openings declined in 2024 because of hurdles in improving account opening systems and demographic shifts.

Newgen’s Greg shared his experience at a community bank where fragmented processes hindered both account opening and commercial lending journeys. By embracing Newgen’s AI-led digital transformation platform, the bank streamlined and digitized various account types — from simple checking and savings to complex IRA and business accounts — reducing the cycle time from days to just 15 minutes.

AI-enabled Banking is the New Future

AI in banking is now a reality. A March 2024 report stated an estimate by the McKinsey Global Institute (MGI) that generative AI could add between $200 billion and $340 billion annually to the global banking sector. The panelists agreed that leveraging AI to enhance banking operations and customer journeys while focusing on data security is the only logical strategy for banks.

AI-driven tools like NewgenONE LumYn offer real-time data and analytics on customer journeys to enhance decision-making. Tools like LumYn are revolutionizing how financial institutions hyper-personalize customer journeys, predict needs, and enhance cross-selling and up-selling opportunities.

As for the back-office operations, AI is transforming loan application processes by automating document intake and data extraction and summarizing complex documents. Thus, it enables institutions to handle vast amounts of information with unprecedented speed and accuracy.

Navigating Regulatory Challenges in the Digital Age

As financial institutions rush to digitize, regulatory compliance remains a critical challenge. United Community Bank’s Chief Retail Credit Officer emphasized that “new technologies and compliance often clash,” underscoring the need for real-time updates on regulatory changes within customer-facing applications. Moreover, upcoming regulations like Section 1071 compliance for small businesses require proactive adaptation with agility.

The BankMidWest VP, too, raised concerns about the rising risks of fraud, such as fake IP addresses in online account opening and the complexities of multi-vendor management, which can increase the potential for fraudulent activities. Forward-looking solutions that integrate across channels and support monitoring are a boon for banks struggling to keep up with the ever-changing regulations and industry norms.

The panel discussion underscored the rapidly evolving financial landscape, where banks must identify and leverage technological innovation. As banks and credit unions navigate digital transformation, it’s crucial to recognize potential pitfalls—like legacy processes and compliance challenges—while embracing the immense opportunities AI and low-code automation offer. By focusing on seamless customer onboarding and efficient loan origination, financial institutions can exceed the rising expectations of today’s customers.

Newgen, a global provider of an AI-led digital transformation platform with over 30 years of domain expertise, provides a strong roadmap to banks and credit unions to stay at the forefront of innovation and efficiency. The future of banking has moved beyond being just digital; it’s all about a digital, dynamic, and dependable end-to-end journey.