How Q2 and Knoma partnered to deliver thousands of educational loans to students

In 2019, Brett Shanley took an idea – that UK workers had serious digital skills gaps in an increasingly digital economy – and turned it into a business: Knoma. Shanley knew there were plenty of educational institutions out there to help upskill workers. Course availability wasn’t a problem. But access to finance was. Employers weren’t always keen to pay and finding a personal loan at a decent rate for a short course was nigh on impossible.

So Knoma launched with the goal of providing zero-fee, and zero-interest finance for continuing education and training courses. In order to build this finance model, though, Shanley knew that he would have to make sure the end-to-end process was as quick, accurate, and replicable as possible – or his costs would soar, and the no-fee, no-interest approach wouldn’t be possible. He also knew that to design and build his own seamless loan management technology would cost millions and take years. He didn’t have the time. So he partnered with Q2 to do it all for him.

A seamless process required

Shanley wanted Knoma to have a neat customer-facing portal with a marketplace of educators where prospective learners could select a course and apply for a loan. But he wanted that application process to be rapid, with as few pinch points as possible. “Once a customer starts the loan process,” says Shanley, “we need to do a lot of work very fast. We have to look at affordability, customer identity, course cost – everything.” And crucially, says Shanley, Knoma needs to make it frictionless since the process is “already quite emotional for the customer.” Rates of abandonment in educational loan applications are typically high.

Knoma uses Q2’s Lending solution, which delivers automated, end-to-end loan management, including Q2’s Portal, Originate, and Loan Servicing. But Q2’s solution isn’t just one-size-fits-all – it’s flexible and configurable too, making it responsive to business realities, markets, and changing ambitions.

Customising the technology

Knoma worked with Q2 to customise and configure their own auto-decisioning, underwriting, and risk criteria and rules. Customer data gets processed quickly, securely, and accurately – and Knoma aren’t tied to one set of systems or processes. They stay flexible – crucial at a time when things like application volume or risk appetite can change in a heartbeat.

The speed of the system is something to boast about, argues Shanley. “Our customers get real-time decisioning in under two minutes – only 10% of applications need secondary review,” says Shanley. And he has ambitions to get that time down to one minute, while adding more education providers and more applications. “If you take too long to lend to a customer,” says Shanley, “they’ll finance it another way. Speed is critical.” Shanley says Knoma uses the data and analytics generated by Q2’s software to make sure they’re “always looking at ways to reduce screen times, friction, risk.”

Fast and faultless

Speed is important, certainly. But so is getting it absolutely right. To make sure they strike the right balance, Knoma uses application programming interfaces (APIs) that plug neatly into the backend of its Q2 Salesforce-enabled technology.

Generally, APIs allow financial institutions to select leading solution providers to link up with in an open and flexible environment. Among others, Knoma APIs into Conga to handle its documentation work. “Our entire business model rests on those loan documents being accurate,” says Shanley. “We need a single source of truth – one model for everyone to view, update, and use for decision-making.” Their API into Conga means data is centrally managed, trusted, and transparent. They don’t have to do it themselves and they don’t have to worry about getting something wrong.

Experience matters most

All of this technology has one leading purpose: better end-user experience. Quick decisions and secure, easy-access information about loans through a slick interface means more students complete the lending process, draw down on funding, and pay back on time. And third parties such as educational providers can access information too, making sure their students’ applications are on track and for the correct amount. Making things easy to use and navigate attracts customers – which is a win-win for everyone concerned: the individual, educators, the workforce, and Knoma too.

Shanley believes that positive user experiences are essential to ensuring workers feel comfortable about upskilling. “Covid-19 dramatically accelerated the need for workers to have robust digital capabilities,” he says. But roadblocks to finance for education means workers risk getting stuck in the past. Knoma’s real-time solution, with its rich features, and enhanced experience delivers a “fair, ethical way to spread the cost of education,” says Shanley, “it’s an alternative that’s on the side of the student,” but one that will end up benefiting the economy too.

The future, together

Knoma’s approach goes well with Q2’s philosophy too. Robust financial institutions like Knoma help build strong and diverse communities. It’s Q2’s goal to provide the technology solutions and support to ensure clients like Knoma can accompany their customers on their financial journey.

After processing £2 million worth of loan applications in its first year, and partnering with nearly 60 providers, Knoma has plans for growth. The global market for education and training will continue to grow exponentially. Knoma is looking abroad to expand, and expects to have upwards of 500 educational institutions offering courses through their platform. They also plan to launch a loyalty programme and conduct skills analysis to help students pick the right course for them, and maximise their investments. Having a flexible, open system from a partner who understands your business model, and wants the same things as you makes this possible.