Consumers Increasingly Comfortable With Digital Loan Applications: Fiserv Survey

Fiserv latest survey showed consumers increasingly at home with digital loan applications, with almost two-thirds of loan seekers using computers or mobile devices to complete at least some application portion.

The Brookfield, Wis.-based fintech powerhouse’s latest “Expectations & Experiences” consumer trends survey found 65% of loan applicants reported using computers or mobile devices to complete at least a portion of the application, up from 56% in 2018.

One of the longest running surveys of its kind, “Expectations & Experiences” builds on years of consumer survey data to provide insight into consumer financial behaviors and attitudes. “Today’s borrower seeks a differentiated experience via any channel they choose, and they are increasingly comfortable completing loan applications through mobile devices, including their phones,” Byron Vielehr, EVP and senior group president, Fiserv, said. “Consumers have come to expect easy mobile experiences, and providing holistic, integrated digital lending capabilities helps lenders meet borrowers’ changing preferences.”

Looking more specifically at the home loan process, increases in the use of mobile devices include:

• Nineteen percent of consumers read loan documents provided by the lender on a mobile phone or tablet, up from 10% in 2019.
• Sixteen percent of consumers uploaded documents requested as part of the loan approval process via a mobile device, up from 9% in 2018.
• Twenty-one percent received their loan application decision via their mobile device, up from 11% in 2018.

In addition, use of mobile devices to initiate home loan payments almost doubled between 2018 and 2019, with 35% using this method in 2019 compared with just 18% the year prior.

When it comes to home loans, most people (71%) are “somewhat or very comfortable” with the idea of completing loan applications online through a laptop or desktop, up from 67% in 2018. The most notable shift is with mobile applications, where 41% are comfortable, compared to only 29% last year.

Interest in mobile wallets as a home loan payment method is also growing, with 24% of consumers expressing interest in using this method to make home loan payments, compared to 13% in 2018.

Screen size (56%) and security concerns (51%) are the main barriers to mobile loan applications, although there are options that would make consumers more likely to complete the loan process via a smartphone or tablet.

Among those who are not at all or not very likely to complete a loan application via smartphone or tablet: 22% said improved website security would make them more likely to complete the loan process via a smartphone or tablet; 17% said access to a representative online would change their minds, up eight percentage points from last year; and the option to pause an application in order to continue in person with a representative would sway 16%, a six-point increase from 2018. The ability to continue online via a laptop or desktop computer (16%) would also be persuasive.

To speed up the loan process consumers are willing to take a number of actions, for instance: 67% would be willing to electronically sign documents using a mobile device (up from 59% in 2018); 61% would be willing to take pictures of loan documents on a mobile device for uploading (up from 51% in 2018); 57% would be willing to allow the lender to verify their identity by uploading a selfie from a mobile device (up from 48%).

After interest rates (50%) and fees (39%), customer service and lender reputation are reasons for choosing a lender, with 37% and 29% respectively giving those as reasons behind choosing a lender.

The majority of borrowers (69%) are satisfied with their home loan process. Among the 31% who report not being fully satisfied, 51% said the process took too long – a 17% increase from 2018. Additionally, 46% said there was too much paperwork involved.

The leading reasons consumers abandoned a home loan application: Poor customer service (46%) and changes to the interest rate or terms (41%). The number who stopped a loan in process due to the lender asking them for the same document twice doubled from 2018 to 36%.

The survey, conducted online within the United States by Harris Poll from May 9-29, 2019 included 3,050 interviews among U.S. adults ages 18 and older. They met the following criteria: someone in the household currently had a checking account with a bank, credit union, brokerage firm or other financial organization and had used their checking account to pay a bill or make a purchase in the past 30 days.