I like your product. Now what?

So, your credit union or community bank has weathered the storm of the past year. Your loans have performed well, you are well capitalized, and you have a good reputation in your community. You are feeling pretty good about your institution and you want to expand.

Your products are clearly better than those of the big banks - loans are cheaper, deposits have better interest rate, and you don't nickel and dime your customers with hidden fees on every turn. So, you get your head of marketing to put together a great marketing campaign to get the word out. She puts together this killer online and email ad campaign, that gets people to your website at a real attractive cost. Clearly people like your offering - and who wouldn't like an loan that has a 2% lower interest rate!

I see this email, come to your website, click on "Apply for a loan" link, and fill out my personal information. 9 times out of 10, I receive a message that says someone will be in touch with me soon.

Meanwhile, someone at the institution took the online application I filled out, printed it, put it in a manila folder, and called it my loan file.

A day or three later, someone calls me and leaves me a voicemail, telling me that I need to mail or fax a copy of my pay check and my driver's license. I, of course, promptly forget - you see, applying for a loan or a bank account is not fun for me. It is a necessity and I would like to spend as little time as possible doing it.

A few days go by, and I fax in the documents. Now, I am not sure if the fax has gotten to the right place. So, I call the customer service number and the nice lady tracks down my fax and tells me that they have what they need and they will give me a decision in a couple of days.

The documents go into my loan file as well.

If I am lucky, a couple of days later, the loan officer calls me and tells me that I am approved for the loan and that I will receive the paperwork that I need to sign by mail. I receive my documents by mail, sign it and send it back. And then I receive a check in the mail.

Of course, if I took a few hours off work and went into the branch, things may go a little faster - that is if I have remembered to take my last three paychecks to the branch.

All that great marketing seems to the user to only be an invitation to an obstacle course.

Well, a few years ago, we did not really have a choice but to do it this way. But today, people expect that they can complete their transactions online - not just start the transaction online and make a couple of trips to the branch - and we must deliver on their expectations.

oFlows - A new beginning

Financial services have been in the news a lot recently, mostly for the wrong reasons. Lay people got a rude lesson in the exotica of financial services - CDS, CDO, MBS, LIBOR, TED Spread and other ingredients of a decidedly unpalatable alphabet soup, that were at the center of a multi-trillion dollar near-collapse of the world economy. The personal consequences of the financial crisis and the ensuing recession have affected many, and I am no exception. My previous company shuttered its US operations. Instead of trying to find work in a hostile job market, I decided to take the plunge into entrepreneurship.

For a few months now I have been involved with oFlows, a company I co-founded, and where I am responsible for building some really cool technology.

Though most of us cannot relate well to exotic Wall Street products, we are all consumers of financial services. We open bank accounts, apply for loans and credit cards, transfer money, pay our bills etc. Financial institutions have historically been extensive consumers of information technology, and they have used technology to automate operations and drive down cost. Since the advent of web, banks and other financial institutions have steadily brought a number of consumer facing functions online. We can check our balances, transfer money and manager our finances quite efficiently online. Generally, these activities can be started and finished in a single session with immediate online feedback and timely email reminders.

But, applying for a loan or opening an account is still a very inefficient process. oFlows takes aim at the origination process and makes it completely paperless.

In the next few posts, I will address these inefficiencies in the originations process in more detail, and how paper stops here with oFlows.