Loan Voicebot: Benefits, Usecases & ROI Analysis
Loan Voicebot: Benefits, Usecases & ROI Analysis
The overall loan disbursals in the micro-lending market increased by 80% in the past few years, driven by a growing demand for quick access to funds among consumers.
Lenders who can’t offer same-day or next-day funding are losing market share to more agile competitors.
But if you’re bogged down by:
- Legacy systems that slow down application reviews
- Inefficient data collection and verification methods
- Limited staff availability for after-hours applications
- Compliance requirements that add complexity to approvals
We might just have the solution to help you accelerate your lending process and reclaim lost market share.
Introducing Loan Voicebots: Your 24/7 Lending Accelerator
Loan voicebots are AI-powered digital assistants designed to automate and expedite the lending process for credit unions.
These systems use natural language processing to interact with customers throughout the loan application journey, functioning as virtual loan officers available 24/7.
Why Do Lending Institutions Need Voice AI?
1. Increasing Abandonment Rates
Research indicates that customers who have abandoned financial services due to a slow application process have increased from 40% in 2016 to 68% in 2022.
Voice AI can provide immediate assistance, potentially reducing these abandonment rates.
2. Rising Costs of Operations
According to a study by the Freddie Mac group, loan origination costs have risen 35%, or $3,000. The average retail-only lender loses approximately $600 per loan today.
This highlights the need for cost-effective solutions like Voice AI to automate processes and reduce overheads.
3. Competition from Digital-First NDFCs
A recent study found that in March 2024, companies disbursed 2.69 crore loans worth Rs 40,322 crore. It further noted that 70% of the disbursements were by 28 companies registered as non-banking finance companies.
Voice AI can help traditional lenders offer comparable digital experiences to compete effectively.
4. Extended Service Hours
The shift towards digital lending platforms allows customers to apply for loans 24/7. This accessibility means that many borrowers are likely to start their applications outside of standard business hours.
Voice AI can provide round-the-clock service to meet this demand.
5. Need for Multilingual Support
Non-English-speaking customers often struggle to understand critical loan information, including agreements, disclosures, and fee structures.
Implementing multilingual voice support helps lenders expand their customer base, reduce risks, and ensure fair access to financial services for diverse communities.
Must read: Conversational AI in Banking: Transform Your Digital Banking Operations
How to Use Voicebots in Your Lending Process?
We can categorise the lending process into three phases – pre-approval, during approval, and post-approval phases.
Let’s have a look at the use cases of voice AI in all these phases.
Pre-Approval Phase
1. Intelligent Loan Product Matching
Voicebots use machine learning algorithms to analyse a potential borrower’s financial profile and objectives.
By asking targeted questions and processing responses in real time, these systems can recommend the most suitable loan products from an institution’s portfolio.
For example, Bank of America’s virtual assistant, Erica, uses predictive analytics to offer personalised product recommendations. This intelligent matching not only improves customer satisfaction but also increases conversion rates.
2. Dynamic Pre-Qualification
Dynamic pre-qualification through voicebots represents a significant leap from traditional static online forms.
These AI-powered systems conversationally engage applicants, adapting their line of questioning based on real-time responses.
This creates a personalised, interactive experience that more closely mimics a human loan officer’s approach.
3. EMI and Interest Calculation
Voicebots quickly calculate EMIs and interest rates, providing accurate previews of loan repayment plans. This transparency helps align expectations between lenders and borrowers.
A study by J.D. Power found that clear communication of terms and conditions can improve customer satisfaction scores by up to 20 points in retail banking.
4. Financial Education and Literacy
Voicebots serve as on-demand financial advisors, explaining complex terms and concepts. This role is crucial, as financial literacy directly impacts loan performance.
The FINRA Investor Education Foundation reports that individuals with higher financial literacy are more likely to pay their loan instalments on time.
Voicebots can play a key role in improving this literacy, potentially leading to better loan outcomes for both borrowers and lenders.
Approval Phase
1. Document Collection and KYC
Voicebots streamline the collection of documents for Know Your Customer (KYC) verifications. As your draft mentioned, they can also perform voice biometric verification or collect OTPs to authenticate user identity.
Research indicates that digital KYC processes can reduce onboarding times by up to 90% and cut costs by up to 70%.
An interesting trend is the integration of voice biometrics for identity verification, which adds an extra layer of security while simplifying the user experience.
Read more: How Conversational AI in KYC Improves Verification Process?
2. Risk Assessment
Risk Assessment Augmentation While human underwriters make final decisions, voicebots assist by conducting preliminary risk assessments. They analyse verbal responses for sentiment and consistency, flagging potential risks.
For example: Ping An Bank in China uses a voicebot that analyses voice stress patterns during phone interviews to flag potential risk factors for human underwriters.
3. Fraud Detection
By analysing voice patterns and cross-referencing responses with application data, voicebots add an extra layer of security.
Take Barclays Bank for example. It implemented a voice biometrics system that analyses over 100 unique voice characteristics, successfully flagging synthetic voice fraud attempts.
4. Application Progress Tracking
Voicebots provide real-time updates on application status, explaining reasons for delays and providing estimated timelines for each stage of the process.
This transparency reduces customer anxiety and significantly decreases the volume of status-related calls to customer service centres.
Post-Approval Phase
1. EMI Payment and Debt Recovery Reminders
Voicebots automate the process of sending payment reminders. This approach goes beyond simple reminders; it’s about influencing behaviour.
Modern voicebots use AI to create personalised, context-aware interactions. They analyse payment histories to determine optimal reminder times. The content and tone of messages adapt based on each borrower’s behaviour and circumstances.
For borrowers who fall behind, voicebots can conduct initial follow-ups, potentially reducing the need for human intervention in early-stage collections.
2. Continuous Credit Monitoring
Voicebots integrated with credit monitoring systems offer proactive financial management by continuously tracking borrowers’ credit profiles.
This goes beyond traditional periodic checks, providing real-time insights into a borrower’s financial health.
The voicebot can alert both the lender and the borrower to significant changes in credit scores, new credit inquiries, changes in debt-to-income ratios, or unusual spending patterns.
3. Feedback Collection
Voicebots can conduct post-loan surveys and analyse customer sentiment. This feedback loop is crucial for improving services.
The conversational nature of voicebots often leads to higher participation rates compared to traditional surveys.
4. Cross-selling Opportunities
Based on the borrower’s profile and repayment behaviour, voicebots can intelligently suggest additional financial products or services.
Boston Consulting Group reports that AI-driven cross-selling in banking can increase revenue per customer by up to 8%.
ROI Analysis of Loan Voicebot Implementations
Financial institutions implementing loan voicebots can expect a significant return on investment (ROI), driven by operational efficiencies, increased customer satisfaction, and expanded market reach.
Here are the stats to demonstrate the compelling return on investment financial institutions can expect from implementing loan voicebots:
Cost Savings:
- Chatbots and voicebots in banking can save up to $7.3 billion in operational costs (Juniper Research).
- AI technologies, including voicebots, can potentially deliver up to $1 trillion of additional value each year in global banking (McKinsey & Company).
- AI technologies could reduce operating costs in financial institutions by 22% by 2030 (The Financial Brand).
Efficiency Improvements:
- Banks can achieve a 2-5x increase in the number of interactions handled per hour with AI-powered solutions like voicebots (Accenture).
Revenue Enhancement:
- Banks can increase their revenue by up to 6% within three years by integrating AI (Accenture)
- AI-driven personalisation in banking can boost a bank’s revenue by 5-15% (McKinsey & Company).
- Companies that have deployed AI-powered virtual customer assistants report a 70% reduction in call, chat, and email inquiries (Gartner).
Customer Satisfaction and Retention:
- A 5% increase in customer retention can increase profits by 25% to 95% (Harvard Business Review).
- Highly satisfied banking customers are 2.5 times more likely to recommend their bank and 2.3 times more likely to stay with their bank (McKinsey & Company).
Cost Comparison:
- Average cost per call handled by a human agent: $2.70-$5.60
- Average cost per interaction handled by a voicebot: $1-$2
Approve, Disburse, and Manage Loans with AI-powered Lending Voicebot
BFSI is the top sector truly embracing the wave of digital transformation. AI-led automation is not only helping lenders expedite loans but is also saving high operational spending.
With Verloop.io, you can build a voicebot that works precisely for YOUR lending business. Automate your most common user queries, set defined process flows that suit your needs, and manage your borrowers at scale.
Built on proprietary NLP and ASR, Verloop.io voicebots use speech as your best arsenal for automating most of your redundant or time-consuming lending processes. Schedule a demo with our team today to learn how you can do that for your business!
Frequently Asked Questions (FAQs)
1. Are Loan Voicebots Secure?
Loan voicebots typically employ advanced security measures such as encryption, secure data storage, and compliance with financial industry regulations like GDPR and PCI DSS. Many also use voice biometrics for additional security.
2. Can Loan Voicebots Handle Complex Loan Applications?
While loan voicebots can handle many aspects of complex applications, they are often designed to work in tandem with human loan officers. They can manage initial assessments, data gathering, and preliminary approvals, with complex cases being escalated to human experts.
3. What Types of Loans Can Be Processed Using Voicebots?
Loan voicebots can be used for various types of loans, including personal loans, mortgages, auto loans, and small business loans. The complexity and regulatory requirements of each loan type will determine the extent of voicebot involvement.
