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Key Benefits of an Automated Loan Management System

One of the characteristics of modern technology is that just about everything that can be automated, is being automated. From shopping to restaurants to CRM’s, automation is one of the most common changes to come to any business. And the various branches of alternative lending, funding and fintech are no exception. 

An automated loan management system has a number of significant advantages over legacy lending systems. Using a modern cloud platform, these systems provide superior customer experiences, improved decisioning accuracy, and eliminate paper documents. It streamlines the entire process of originating, underwriting, and servicing Alternative Loans and Merchant Cash Advances, or whatever funding vertical you work in. 

Replacing manual steps with automation, transforming paper into digital format, and gathering performance data on all aspects of your lending practice lets you:

  • Provide a better user experience to improve the speed and accuracy of loan applications
  • Process a larger number of loan applications with existing resources
  • Eliminate sources of human error for faster, better-quality evaluation decisions  
  • Establish predictable, repeatable, and auditable processes that support compliance
  • Reduce delays and costs associated with paper processes
  • Analyze process and loan performance with the goal of continually improving efficiency and profitability

Unlike legacy solutions, that are often a hodge-podge of outdated and unconnected systems, each handling only a single element in the funding process, modern, automated loan management solutions helps firms attract and close more deals, accelerate the underwriting process, generate more pricing options, reduce errors, and ensure greater consistency. These funders also earn a more professional reputation among borrowers, brokers, and syndication partners.

Key Benefits of Automated Loan Management Systems:

1. Better Loan Processes and Results

For each origination, loan officers collect a large number of documents and data points, including face-to-face interactions, email, fax, text, or documents uploaded through a site. They all need to be added to the system, carefully tracked and thoroughly reviewed against information on the loan application and from third-party sources. Technology can identically process every document, and easily integrate 3rd party data sources to provide a faster, more reliable and more accurate process. 

Automation also decreases the manual work associated with notifications. Every application, and often the various stages requires a response or notification. A quality system helps lenders create a variety of notification templates, specify triggers for when they are sent, and then populated with loan-specific information before sending the notification. 

2. Improved Speed to Completion

Using intelligent technology options, such as smart content recognition, and automated data population, document review and verification times can be drastically reduced, which speeds up processing and shortens origination time frames. 

Automation improves applicant evaluation and loan decisioning. It eliminates repetitive manual steps that are best executed digitally and allows human expertise to be applied where it works best. Some examples include:

  • Integration with credit data sources and services such as LexisNexis or Experian lets lenders automatically and quickly verify applicant information.
  • No lost or misplaced documents. Paper documents converted to digital images are immediately and securely accessible by the underwriter, so they can review applicant materials more quickly.
  • The combination of decision rules and integration with credit data sources and services lets lenders automatically calculate optimum loan structures and terms.
  • Decision rules provide predictable, repeatable processes that remove the variations associated with human decisions and demonstrate compliance with lending regulations.

3. Better Tracking and Transparency

With just a couple of clicks, automated loan management solutions can prepare a comprehensive view of all documents that have been received, verified or flagged for follow-up, and where the application is in the approval process. In contrast, documents collected and tracked through manual efforts may not be available on various systems, paper-based checklists or a loan officer’s email account.

In addition, advanced reporting options in a CRM give managers essential data on conversion rates, lead sources and more!

4. Scalability and Growth

A better loan management system also greatly reduces training demands and risk, helping lenders quickly and more affordably scale to meet peak seasons. That translates to lower risk of quality degradation and lenders can save on overhead costs associated with ongoing training.

The more you eliminate manual processes and streamline your business, the more volume one person can handle. This means that with your current team, you could dramatically increase your deal volume. Further, adding more resources lets you increase your deal flow just that much more!

Because cloud based CRM’s can be implemented and used anywhere, you eliminate all sorts of restrictions, such as geography or only being able to login from a certain machine. Since the process and data is also shared amongst the team, adding new team members becomes faster and more intuitive, helping you onboard without slowing down the train!

 

-Ryan and the CloudMyBiz Team

 


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