The Pursuit of One-Click Commercial Credit: What you Need to Know

Commercial Credit, Small Business Credit, Digital Lending

Across industries, the Amazon effect has raised expectations for a frictionless user experience, and commercial lenders know they must keep up.

The race is on to figure out fast, safe, and low-cost lending to small- and medium-sized businesses, accelerating the journey towards the ultimate goal of one-click commercial credit – or using automation to simplify credit to the point of a single click. While no one has quite found the solution, billions are being invested by big banks and big tech to solve this problem, driven by a vision of big profits.

In the meantime, online and alternative finance lenders are streamlining and automating the credit approval process—and capturing market share. They typically offer more user-friendly interfaces and faster decisions than traditional commercial lenders. That’s appealing to business consumers and the underserved small business market, who find a lengthy underwriting process burdensome.

In the age of the digital lending revolution, the pursuit of one-click commercial credit is something that we are watching closely. In the meantime, there are a number of ways lenders can be sure they’re evolving in the right direction.

How can commercial lenders adapt? 

The leading commercial lenders – whether big banks and big tech or online and alternative – are focusing on transforming commercial lending into a turnkey, user-friendly experience. Doing so will boost your results – from higher margins and win rates to quicker cash distributions, fewer defaults and increased predictive accuracy – and your reputation.

The higher the level of automation, the less touch time dragging down your loan origination and portfolio management processes. By infusing data-driven decisions throughout the lending cycle, you can enhance the accuracy and value of your relationship managers.

As they move toward one-click credit, lenders are aiming to make the whole credit process available on their customers’ smartphones. To do so, they are miniaturizing, automating and qualifying lending technology in ways that previously seemed unsurmountable. For example, lenders will leverage: 

  • Identity verification: Using technology such as facial recognition, lenders will seamlessly be able to assess and verify whether borrowers are who they say they are.  
  • Electronic documentation: By having all documents – including term structure, pricing, covenants and length of loan – accessible online or on an app, banks ultimately will be able to process loan documents on their smartphones. 
  • Composite credit models: Using composite credit models, lenders can get a better assessment of who they’re dealing with via simple API links. 


The benefits of embracing digital solutions

As commercial lenders reach for the golden ring of one-click credit, the innovations and investments they make on the way are helping reduce documentation requirements; build credit models that capture real-time, relevant data; increase their ability to assess risk on "thin file" customers; and price loans based on risk profiles. 

Such benefits improve the overall user experience. Lenders that look to incorporate digital services and products for a more customer-centric model will stay ahead of the game. Studies have proven that these user experience leaders will quickly set themselves apart from the pack. 

As we watch the rapid pace of innovation when it comes to the pursuit of one-click commercial credit, there will be winners and losers, missteps and false starts. Ultimately, however, one-click lending solutions will offer a significant lift to millions of Main Street businesses.

As part of our mission to provide lenders with more knowledge for confident decisions and fuel growth for the Main Street economy, we will continue to keep our lender community apprised of the latest developments in the journey to one-click credit. Such insights into future market developments help you make immediate business-making decisions, ultimately increasing lending confidence and efficiency. 

You can learn more about alternative lending tools and strategies such as one-click credit here. Feel free to register for our regular economic update webinars, when we team with KeyBridge to provide insights on the quarter and discuss the most pressing topics in small business lending.