A newly formed joint venture in the US is pushing into a business that has been slow to develop for financial institutions: using the Internet as a real-time vehicle for generating consumer loan business. Digital Dialogue, a Michigan-based company founded last month, aims to blend Web technology with the call centre to allow instant loan approval, 24-hours a day.
Mr Peter Schmitt, chief operating officer, said it identified five community banks in the US as potential pilot testers for its service. "We're targeting credit unions and banks - institutions that are looking to provide different types of services to their members," Mr Schmitt said.
Digital Dialogue, a joint venture between Maxxar, a developer of computer telephony integration with 2,000 installations, and Dialogue Marketing, an award-winning call centre, offers four basic services: information collection, credit information, loan decisions and callcentre support.
"What's different here is that there is interaction on a real-time basis with someone over the Internet," said Mr Michael McEvoy, a director at the Tower Group research firm. "As the role of the call centre is expanded, there are a lot of integration efforts occurring between the Internet and the call centre in general," he said.
The Tower Group estimates that the business of outsourcing consumer loans will more than double to $200 million (€190 million) in 2000, from about $91 million in 1998.
Digital Dialogue, said Mr Schmitt, was alone in seamlessly integrating the Internet with lending agents to facilitate applications. "We've glued a lot of the pieces together," he said. "The novelty with our service is the ability to talk with an agent online while filling out a form. Most institutions don't have the ability to do this instant agent dialogue while on the Internet."
Where the Internet has its biggest advantage over call centres, Mr Schmitt noted, is in allowing quick turnaround for documents and forms.
Using a phone switch and software from Interactive Intelligence of Indianapolis: "We can push pages through to an applicant - say, a map showing a bank's branches, or current interest rates," he said.
Until now, Mr Schmitt said the Internet's rise as a channel for closing loans has been hampered by applicant frustration with the length of the process and uncertainty over when someone would review and approve the application.
"We think this type of agent interaction can improve that," he said. "We need the human element behind the electronic interaction to make it fly."
His company's system works by directing customers who request loans from a bank's website to a Digital Dialogue site that looks just like the bank's. The applicant can then apply over the Internet while "chatting" with an agent over the Web. If he has any questions or needs assistance, he can click on an icon to talk to an agent on-line. The agent chat window pops up and he can be linked into a customer service representative in the call centre who, via text chat, can see what the question is and try to answer it. The agent can also transfer information in the form of documents to the applicant`s computer.
Once the information is collected, the service retrieves a credit bureau report and scores the applicant using the institution's lending criteria - in an average of 2.7 seconds, Mr Schmitt said.
The score dictates whether the application will be approved or passed on for further review.
An added benefit may come from cross-selling. For example, when a caller applies for a car loan, the agent can be notified, by links to the bank's database, that the customer does not have a credit card or line of credit with the institution, and pitch both products to the caller.
Digital Dialogue is charging a minimum of $1,800 a month or $25 per application with a minimum of 72 applications sold to the institution. By May, it could offer customers real-time processing of home equity loans and mortgages, Mr Schmitt said.
Financial institutions that may sign up with Digital Dialogue include "banks that already have a strong loan portfolio and others who want to extend their lending base through the Internet", he said.
The Tower Group's Mr McEvoy said credit unions and community banks "are an easy sell" for the service because they have to minimise their costs and so choose to outsource automated consumer lending. Theoretically, he said, Digital Dialogue could sell the service to larger institutions "but it probably couldn't cope with the volumes".
For now, it operates a 135-station, multi-channel call centre in Southfield, Michigan.
