Loan Declined Journey
Once a customer has been declined for a loan, their need for credit doesn’t go away. More and more people apply for loans to pay for everyday essentials, like utilities and food – things they should NOT need credit for.
Our Loan Declined Journey provides personalised alternatives for customers who have been declined for a loan, and incentivises them to take action.
Problem
Every year, the lending sector declines millions of loan applications. Typically, these individuals receive only a generic email offering money management tips, signposting to free debt advice services, and a list of other potential support services. The information is generally not tailored to customers’ needs, doesn’t address their immediate need for cash, and can be mentally overwhelming.
For many customers, when they are declined a loan for something essential, the need to access cash does not go away. They may end up turning to very high-cost (over 500% APR) or illegal lenders for the urgent funds they need—a choice that only worsens their financial situation.
Due to a lack of transparency from lenders, customers find it difficult to identify the root causes of their loan application rejections, which can be the same factors contributing to their financial vulnerability. However, this does not stop them from continuing to apply for loans until they get accepted.
Opportunity
We see the loan application rejection as a key opportunity to identify early indicators of financial vulnerability and engage with customers at the initial stages of their financial concerns. If we can engage them at this point, vulnerable customers could access more tailored options, leading to improved outcomes and helping to prevent financial hardship. The key to success is offering short-term, actionable options for the customer that eliminate the need for the loan.
Lenders collect valuable customer data, but its use is often limited to assessing loan applications. We can use this data to personalise and streamline signposting processes. This approach will not only enhance the customer experience but also increase the welfare support sector’s ability to serve those in need.
Solution
The Loan Declined Journey is a one-stop support portal to help rejected loan applicants improve their financial well-being and resilience. The portal will present customers with potential solutions based on their specific circumstances and financial situation, as well as the reason they applied for a loan and why their loan application was rejected.
By filtering potential solutions, the portal reduces the number of choices, prevents cognitive overload, and incentivises customers to take action. However, it still presents enough options to give customers the freedom to focus on the actions they feel are most important. Customers will have a personalised dashboard where they can view the potential pathways available to them, track their progress, and see the next steps they should take.
The solution takes insights from the customer, combining them with available data to create a system where the customer feels listened to and their most immediate concerns are addressed first. We break down the customer’s actions into short, medium, and long-term steps so they don’t feel overwhelmed and can focus on what they can do now to improve their situation.
The FCA Financial Inclusion
We presented the Loan Declined Journey at the FCA Tech Sprint with Moneyline, and in only six weeks, we reached 1,000 weekly active customers and provided £15,000 in emergency support for vulnerable customers—over 50% of this went to pay for food and utilities. You can read more details about this in the article “When Credit Isn’t the Answer”.
The Loan Declined Journey (Money Toolkit), which was built in partnership between Moneyline and Inbest, was awarded the ‘Eureka’ prize for the most original tech adaptation.
Book a Demo
Reach out to explore how our Loan Declined Journey provides personalised support to those in financial difficulty, enhances customer engagement, and ensures compliance with regulatory requirements.
