Embedded lending – the integration of lending into non-financial ecosystems – presents a major growth opportunity for lenders. As consumers embrace the uber-convenience of accessing the funding they need when and where they need it, 45% of loans could be taken out in a non-financial context within just five years.

However, research from OneSpan in partnership with MoneyLIVE, and Smart Communications, surveying over 350 senior executives from across the global lending industry (including the UK), finds frictionless customer journeys will be critical to success as this market takes off.

To capitalise on this opportunity, lenders must match the instant gratification expectations of today’s online shoppers, who will abandon loan applications and their e-commerce carts if they are faced with unnecessary friction. In fact, 93% believe smooth and effortless loan applications will be a survival factor for lenders.

“A digital process that connects data capture, identity validation, document generation and then e-signature results in more completed business,” said Sameer Hajarnis, VP Growth and Transformation at OneSpan.

“The tools exist to remove so many of these abandonment trigger points,” he said. “Our survey asked those who offer the option of e-signatures extensively across their lending products whether they found signature to be an abandonment risk flash point. For these lenders, the risk of abandonment at signing was more than halved compared to those still requiring paper-based signing.”

Making sure customers can easily access human assistance across all channels will also be key to keeping the customer journey on track. “Again, we have the tools,” said Hajarnis, encouraged to see that lenders are now investing in smart solutions to seamlessly embed human assistance into the lending journey.

“More than half of the organisations we surveyed are investing or planning to invest in behavioural analytics to automatically identify when human assistance is needed and almost two-thirds are targeting virtual meeting rooms that seamlessly combine digital document completion with a human agent.”

Ultimately, the research shows that using the latest technology, alongside low friction yet secure identification and verification methods, brings not just solutions for the embedded lending provider but for the broader lending industry. Lenders will benefit from improved engagement, reduced risk of customer default, operational efficiencies and increased revenues.