How the new lending technology is reshaping the loan origination process?:
With the advent of trusted internet networks, lending processes are shifting from manual operations to the cloud, also known as the digital origin. Financial institutions have been able to facilitate day-to-day interaction with customers smoothly and effortlessly and have also achieved greater efficiency with large-scale banking services. Today, new lending technology, powered by the cloud and automation, is shaping the lending process.
Let’s take a look at the benefits of both technologies.
Some of the key benefits of cloud services include lower costs, rapid deployment, and near-universal availability. It enables borrowers to use the latest software without investing in IT infrastructure and space, as well as without operational costs such as electricity and system management.
• Rapid Deployment With no hardware to purchase and deploy, a web-based LOS can be deployed easily and quickly in days or weeks, rather than months like a legacy system. This time-saver can be a big plus for new lenders planning a quick go-to-market.
Wide availability A web-based user interface (UI) is more convenient for general organizations and home businesses because it provides access almost anywhere. Mobile availability also allows borrowers to easily track the progress of loan payments.
• Legacy integration Cloud-based integration provides instant access to all relevant data sources for identity, employment, credit, and income verification without expensive and time-consuming programming. This eliminates the manual verification process and speeds up request processing.
• Scalability Cloud-based LOS systems are designed to meet today’s credit needs and can be easily expanded in the future to meet the computing, data, and geographic growth of a growing business.
• Continuous software updates Software is constantly and quickly updated in the cloud, allowing lenders to immediately take advantage of bug fixes and functional improvements made in response to customer inquiries.
Automation is enabled by predefined decision rules and ensures faster and more accurate processing of loan applications. Eliminate standard manual steps that allow lenders to quickly change processes as markets change, achieving a new level of efficiency.
Enabling faster loan decisions A fast loan process is a competitive advantage for any lender. Automation technology speeds up lending processes and facilitates consistency in decisions. Apply human skills where they are best used, such as evaluating an application that accurately, but not exactly, meets qualification thresholds. Automated decisions replace countless manual decisions and tasks, speed up the lending process, and enable borrowers to quickly and consistently determine which financial applications to fund.
• Automated decision rules support data-driven processes Automated decision rules enable a lender to eliminate manual steps and use data-driven processes. Standard decision rules can be used to evaluate the criteria for the correct loan ratio, interest rate, and loan period. If the main criteria score very well, the automated decision rules speed up the transition, or if the criteria’s levels are not met, the request will be blocked. Automated decision-making rules can sometimes advise asking questionable questions to a credit specialist.
• Allow rules for business users. Criteria-based automated decision rules require no technical skills and can be easily created and edited by business users. It also provides greater flexibility for automation, such as fully automated, combined (using automated and human policy assessments), or fully manual policy assessments, such as aptitude thresholds. The versatility of decision rules gives lenders the flexibility to use automated and policy-based applications.