Insights to Action: Best Practices from “Digital Denial: The Hidden Cost of Lending’s Communication Gap”

Key Takeaways

• • 80% of borrowers want text communication during the loan application process, yet 41% receive no texts at all.
  • Lenders using text see tangible results:
    • • 69% of borrowers who receive text updates during origination recommend their lender.
      • 75% of Gen X and younger borrowers rely on text reminders for on-time payments.
      • Borrowers are 28% more likely to complete applications with text reminders.
  • Text messaging positions lenders to exceed borrower expectations and capture greater market share.

Best Practices

1. Adopt a Mobile-First Mindset Across the Customer Journey

Integrate text messaging into every phase of the lending cycle—from marketing to bill payment and collections. Consumers want text reminders, updates, and payment options—but few lenders offer a truly end-to-end solution.

• • Best practice: Build a comprehensive workflow that includes application submission, document collection, payment setup, and customer support to meet borrowers at every touchpoint. 
  • Best Practice: Send real-time updates like, “Your loan application is 75% complete. Submit missing documents now to move forward!”

2. Build Trust with Transparency and Security

Security concerns top the list for borrowers, with 74% worried about data protection and 85% concerned about fraud from unrecognized numbers. Building trust is paramount to a successful texting strategy. 

• • Best Practice: Send your business logos via MMS as the first touchpoint in a campaign. 

  • Best Practice: Use recognizable short codes to reassure borrowers of the message’s authenticity.

  • Best Practice: Add trust-building messages such as, “Your security is our priority. All communications will come from our verified number.”

3. Ensure Compliance as a Foundation

Adherence to TCPA, CFPB, and state-level regulations ensures your communications are legally sound and carrier-compliant.

• • Best Practice: Include clear opt-out mechanisms in every message, such as “Reply STOP to unsubscribe.”
  • Best Practice: Partner with a vendor that understands regulatory nuances to ensure message templates and workflows meet carrier standards and protect your business.

4. Deliver Personalization That Drives Engagement

Today’s borrowers expect more than transactional messaging. Hyper-personalized communications tailored to their specific journey stages are key to higher engagement and a better customer experience.

• • Best Practice: Use borrower data to create contextually relevant messages that move customers through their loan journey, such as “Hi [Name], your loan is approved! Click here to finalize your terms.”
  • Best Practice: Use text as a customer loyalty and retention tool. For example, “As a valued customer, you’re eligible for a credit line increase. Click here to learn more!”

5. Enable Two-Way Texting for Seamless Interactions

Two-way texting transforms customer interactions, enabling borrowers to ask questions in real-time and resolve issues without friction.

• • Best Practice: Enable templated responses for common FAQs, such as “When will my funds be available?” or “How do I submit missing documents?”
  • Best Practice: Provide keyword functionality such as, “Text PAY NOW to complete your payment or REPLY with questions.”

6. Maximize Revenue Opportunities

Text serves as a dual-purpose channel, driving both engagement and revenue. By promoting timely, relevant product and services, lenders can unlock new growth potential.

• • Best Practice: Introduce tailored product recommendations at key milestones, like loan approval or payment completion.
    • 67% of borrowers are open to receiving recommendations, making this a strategic opportunity for lenders.
  • Best Practice: Send limited time offers or promotions to drive urgency and borrower action. For instance, highlight discounted rates or exclusive opportunities for repeat customers, “Exclusive offer: lock in a lower rate on your next loan! Reply RATE to get started.”

What’s at Stake?

The opportunity cost of failing to adopt a comprehensive text strategy is significant. Borrowers are actively seeking lenders who meet their digital-first expectations:

• • 44% of consumers would actively choose a lender offering text communication over one that doesn’t.
  • 79% consider mobile-friendly application processes a priority.
  • 49% of Gen Z and Millennials are prepared to switch providers if text communication options are unavailable.

Meeting borrower expectations requires more than just communication—it demands connection. A comprehensive, compliant texting strategy enables lenders to deepen trust, enhance the borrower experience, and create sustainable growth.