A New Approach for Banking

Addressing Uncertainty, Inefficiency, and the Push for Automation 

The banking and finance industry faces a perfect storm of uncertainty. With interest rate fluctuations and the unknown impact of global tariffs on inflation, institutions are grappling with hesitation in the markets—and it’s hitting loan activity hard. Consumer and real estate lending is down, and credit unions are particularly feeling the squeeze from unsecured auto loans issued during the pandemic that are now showing signs of stress.

At the same time, there’s a strong push to grow customer bases—but at the right cost, and with a focus on the right segments. Financial institutions are trying to win over a customer pool that is increasingly nomadic—between 18 to 20 million customers switch banks annually. And these aren’t single-account customers: the average person now holds over four checking accounts.

Yet while digital banking has surged—58% of customers have moved to digital relationships—personal connection still matters. The branch model is fading (branch-centric activities are down 29%), but people remain the most critical resource when customers need real, human assistance. That’s especially important as 17% of customer relationships are responsible for 41% of total revenue and a staggering 87% of deposits.

So, how can banks become more efficient, meet growing customer expectations, and manage risk in an increasingly digital ecosystem?

It Starts with Automation

One of the biggest roadblocks in lending today is the slow, outdated title and closing process, particularly in home equity and mortgage lending. The standard timeline to verify title and complete checks is still 4–6 weeks—far too long in a world where buyers expect instant results. Banks are scrambling to automate this process, reduce turnaround times, and meet the demands of today’s fast-moving market.

Technologies like remote online notarization (RON), e-closings, and digital title verification offer real promise—but adoption has been uneven. A lack of full title data coverage across the U.S. remains a barrier, and until that is solved, this crucial step will continue to slow down the home lending pipeline.

Operational Inefficiency Is a Hidden Cost

Manual back-and-forth between borrowers and lenders often stretches the origination process through 4–6 cycles, delaying funding and driving up costs. It’s not just frustrating for lenders—it’s a major contributor to customer drop-off. In fact, friction in the process can reduce conversion by up to 48%.

Low utilization of approved credit lines is also a concern. With limited borrower education and poor app experiences, customers are often unsure how or when to draw on their credit—resulting in underutilized products and lower profit margins. Some institutions report utilization rates as low as 34%.

Risk, Regulation & The Need for Speed

Beyond inefficiency lies another pressing concern: risk. With slack in the system, customers are using lending competition to their advantage, attempting to close on multiple home equity lines (HELOCs) within a single week—an illegal and dangerous trend that’s increasingly hard to track with manual systems. Faster appraisal turnarounds, clearer visibility, and better fraud detection tools are essential to mitigate this risk and others before they become a crisis.

What’s the Path Forward?

To stay competitive, compliant, and customer-centric, banks and credit unions need to act—and fast. Here’s a high-level action plan:

• Invest in Technology: Automation, AI, RON, digital title, e-closing solutions, and smarter borrower interfaces must be at the top of the list.
• Adapt to Market Shifts: Understand customer behavior changes and align resources in digital channels, branch roles, and customer service.
• Collaborate with Proven Partners: Outsourcing parts of the origination, title, or closing process to experienced partners, like TDEC, can reduce operational drag while maintaining service quality. Well-integrated processes and faster turnaround for validation and funding can slash approvals to mere minutes.
• Streamline the Customer Experience: Personalize and digitize as much of the journey as possible to reduce friction and increase loyalty.

The state of the banking industry calls for stability and decisive action. While uncertainty may be unavoidable, inefficiency and delays don’t have to be. By leaning on business process outsourcing partners to improve operational flows and tech adoption, banks can not only weather the current storm—they can come out ahead.