Declining a loan application can be a poor experience for customers. Often the reasons are opaque, leading to an increase in complaints, calls to centres or simply taking business elsewhere. From a wider perspective, customers who are declined credit because of affordability issues can find themselves becoming “economical with the truth” to secure funds from more expensive and poorly suited lenders.
Details within this case study have been changed to protect client confidentiality and the images reworked from the original designs.
Working with an entrepreneur planning a lending product I reviewed data around reasons why customers felt let down when their loan application was rejected. The aim was to create a component in a wider product experience that would reinforce a brand centred on responsible lending and empower failed applicants to make positive choices about their lending habits. This had to be done quickly as the exercise was part of a wider product roadmap exercise with a tightly constrained budget and timescale.
Aside from the obvious disappointment of not being able to access funds, three key areas stood out:
- it wasn’t clear what criteria was being used to judge whether a loan could be offered;
- it wasn’t clear why individual loans had been rejected;
- customers felt they were left in limbo with no clear direction on what to do next.
After brainstorming some ideas around the capabilities of the loan underwriting engine I decided to use a design principle from Expert Systems : it must always be able to explain its decision. This meant reaching into the loan process a little, as well as capturing the rejection.
The design contained three key elements:
- a “processing your application” interrupt that gave the user a simple indication of what was being considered, with simplified animation designed to show progress at roughly reading speed;
- a “sorry” page that explained why the application had been rejected by referencing the four key decision area; and
- a “this is why” explainer that demonstrated the logic behind the rejection, and offered some tailored suggestions on how to manage their finances better.
Using Keynote I pulled together a clickable prototype in a couple of hours. We then sat down with four “volunteers” in the shared canteen and ran some experiments to get feedback and help decide if it was worth pursuing.
The response was favourable, particularly with how spending was set out and the impact of repayments. The explanation as to why the loan wasn’t offered was also liked, although the wording for the “what would happen if we did lend you the money” was judged to be a bit “scary”. There were also some suggestions around the placement of elements. The only element that was roundly rejected was the proposed downloadable guide. Although they got the reasoning behind it they felt it would be better to present simple bullets on the page rather than longer blog posts collected together.
Within a day I’d taken the nucleus of an idea and turned it into a firm requirement on the product roadmap. The design wasn’t perfect, but it gave a strong starting point for when it was its turn to enter development and more detailed research and design work could start.
The following are based on the original Keynote prototype, reworked to protect client confidentiality.
Rather than a single “progress bar” multiple bars were displayed to show the different aspects of a loan decision.
The “Sorry, we rejected your application” outcome. This sets out the high level reason why the loan couldn’t be approved, using the output of the decision engine in a user friendly format.
An extract from the full explainer, showing how the additional burden on the user’s finances would put them into deeper debt. The full explainer can be accessed by clicking on the image (opens in a new window).