In a fast-paced, competitive world of the lending industry, financial institutions are continuously looking for ways to improve their offerings and profit margins. No matter the type or size of a financial institution, the inclination of lenders towards technology has caused the automation of the lending process. Using automation tools, not only do lenders improve their operational efficiencies, but they also provide their customers with efficient and prompt services. 

The need for automation in the lending sector

Unlike the previous times, today, customers are more educated, well-informed and have become more demanding than ever before. They are aware of all the potential lending options available to them in the market. If for any reason a lending firm doesn’t process a loan application in the desired time frame, customers are more than ready to switch to another firm that may serve promptly. 
In a typical scenario, manual processing of a loan application is among the biggest challenges faced by any brick and mortar lending firm, as it takes a lot of time and often results in loss of business to the competition. As a result, many financial institutions and banks are now switching to software programs that have resulted in the automation of their lending processes, covering the complete loan life cycle – right from loan origination through to loan management and application process, debt collection, risk assessment, lending analytics, and reporting.

Tools to automate the lending process

Choosing the right type of loan processing software that incorporates digitized tools can be overwhelming for any business. To offer the best possible customer experience alongside streamlined, efficient servicing, below is a snapshot of some of the automation tools available to help you gain a competitive edge.

Document Imaging

Taken into consideration the number of pages in a typical loan file and the multiple copies required, it is evident that each loan will cost you around 100+ sheets of paper. Integrating document-imaging into your loan origination system can save you money by cutting back document duplication, storage, and destruction. Needless to mention, it also saves you processing time by storing your documents on the cloud that allows access for all authorized parties. One such tool is DocumentSnap. It lets you go paperless without much hassle. You can even make your loan documents searchable and ensure they’re safe and secure.

Live Chat Support

Customer servicing is an indispensable aspect of any business. Whether you are small to medium-sized lender, you need to stay focused on activities such as revenue generation, target market expansion, digital channels development and more. By offering live chat support and help desk, you can provide your customers with an online support system that’s both knowledgeable and professionally polished. These tools not only improve customer satisfaction but also help you build your credibility in the market. Zendesk Chat is one of the most popular tools that let you engage your customers in real-time over websites, apps, and other messaging platforms.

Payroll Integration

Similar to bookkeeping software, there are several tools that can integrate payroll system into your loan origination software. Payroll integration allows users to evaluate and customize calculations, commission transfers, account balances, fee caps, and more. Xero is online accounting software that helps you monitor and update the payroll system in real-time, right from your lending software, which in turn expedites the loan origination process. 

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Automated SMS Reminders

With efficient text messaging platforms, lenders can automatically send payment reminders to late payers, personalize messages with respective account details, and follow up on payment confirmations, among other things. The advanced tool also ensures the lenders get alerted in advance in case of potential bad debt so that they can take measures accordingly. Bitrix24 is one of the best SMS marketing platforms, used by over 4 million companies worldwide. Available in cloud and on-premise with full source code access, it also supports social media marketing capabilities.

Automated Email Communication

An automated marketing tool enables lenders to send custom messages to their customers via email, push notifications or in-app messages, based on real-time triggers. Choosing from an assortment of message styles for reminders, tips, announcements, and conversations, you can target the right people, at the right time, with the right message. The most popular tool in this category is HubSpot. Based on your needs and budget, you can take advantage of its CRM features.

Electronic Signatures

Seamless integration with a well-known e-signature tool lets you sign documents safely online. Needless to mention, e-signatures have eliminated the need for waiting and meeting in-person to get signed the physical files. Since documents are stored on a central server, the document signing can take place within the system, and you need not print any loan documents to be mailed to your customers. One such widely used tool is DocuSign that makes it easy for you to sign documents or send them out for eSignature.

Customer Interaction Tracking

This tool enables the system admin to log, collect, and easily access all sorts of interactions between a lender and a borrower. Payment history, customer service requests, queries, and other similar types of data are recorded automatically in the system. The interaction logs can be further used to analyze customer behavior. Salesforce Essentials is your one-stop hub for all the sales, CRM, and customer servicing operations.

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Bureau Integration

The tool enables lending firms to effectively implement multi-bureau strategy and provides their borrowers with the convenience of a single platform that allows data consolidation from credit bureaus. Besides, it also enables lenders to integrate their credit risk systems to multiple credit bureaus. With in-built security protocols and flexible transformation modules, the lenders can reduce the down-time risks, thereby eliminating asynchronous communication. One such tool is TransUnion that offers a range of risk and credit analysis products.

Regulatory Compliance

Keeping business compliant from the beginning is of primitive importance to any organization alike. In today’s changing environment, the role of regulatory compliance in the lending sector can’t be sustained with a check-the-box approach. Integration with the right compliant solution, the lending software enables lenders to keep track of all updates and monitor their potential risks. One such option is the Corporator Compliance Management platform that regularly reports the status of your business compliance framework and controls.

Lending Analytics and Reporting

It is evident that any loan process generates an enormous amount of data. Understanding of this data is the first step to making a well-informed strategy that drives the lending business. The analytics tools make it easy to convert your raw data into actionable reports that have the potential to predict trends, alleviate risks, and drive revenue. CloudBankIN is an innovative cloud platform that offers a plethora of features right from loan origination, loan management, servicing, and reporting through to business process outsourcing. 

Sign-off

As a lender, to compete in today’s digital-first world, you need to provide your potential customers with innovative products, swift approvals, and matchless consumer experience. By using the above-mentioned tools, ensure your loan processing technology can be quickly adapted to fit changing business scenario.