Unfair Gaps🇺🇸 United States

Banking Business Guide

41Documented Cases
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All 41 Documented Cases

Customer frustration and churn from slow, unclear account-opening experiences

With 51% of online deposit applications abandoned and 60–68% digital onboarding failure, banks lose a significant share of potential customers and their lifetime value, equating to ‘billions in lost revenue’ across the industry.[2][5] A bank with 100,000 annual digital starts losing half of them forfeits tens of millions in lifetime value.

Customers report that account opening taking 45–60 minutes is strongly associated with demands for improvement, and many digital users abandon due to difficulty finding answers, security concerns, and lack of save-and-resume. This friction causes lost prospects and pushes existing customers to competitors.

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Lost fee and interest income from abandoned and slow loan applications

Banks report that 30–70% of started digital loan applications are abandoned; for a mid‑size bank targeting $1B in annual new consumer loans at a 3% NIM and 1% fee income, losing even 10% of potential volume equates to ~$40M in lifetime revenue forgone per year’s cohort

Cumbersome origination and decisioning workflows cause a significant share of applicants to abandon before approval, directly reducing funded volumes and associated fee and interest income. Industry studies show a large gap between applications started and loans funded due to friction in documentation, communication, and turnaround time.

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Origination fraud and misrepresentation driving credit losses and repurchases

Mortgage origination fraud alone estimated at ~$5.36B in 2023 originations; individual bank repurchase/settlement waves have run into the hundreds of millions to billions over misrepresented loans

Loan origination processes are repeatedly exploited by borrowers, brokers, and even employees to misstate income, occupancy, or collateral, leading to elevated defaults and expensive buybacks or put‑backs. Weak upfront verification in credit decisioning shifts losses into later charge‑offs and indemnification claims.

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Slow approval and funding delaying interest income and hurting competitiveness

In mortgage, application‑to‑close cycles of 30–60 days are common; institutions that cut cycle times by ~20–30% report materially improved pull‑through and reduced lock‑extension and hedge costs, worth hundreds of dollars per loan and millions annually at scale

Prolonged time from application to decision and funding reduces net present value of interest income, jeopardizes deals, and forces banks to grant longer rate‑lock periods or concessions. Consumers often receive approvals from alternative lenders within minutes while traditional banks can take days, shifting business away and delaying cash conversion on approved loans.

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