How Automation Can Help You Overcome Loan Origination Process Challenges

Your prospects have more ways to access loans than ever before. To cut through the noise, your loan origination process needs to be seamless and effective. That means overcoming some of the key challenges your business faces:

-    Optimizing the speed of the process
-    Ensuring transparency at all stages
-    Maintaining compliance throughout.

If you don’t overcome these challenges, your bottom line will feel the squeeze as unhappy customers start looking elsewhere. 

The solution: Automation

Here’s how automation can help you overcome these loan origination process challenges to give both applicants and reviewers a better experience, at every stage of the loan origination process. 

1.    Pre-qualification
Collecting the required financial data from an applicant can be time-consuming and cumbersome. Automation speeds up this process so you can instantly establish whether an applicant is ready to proceed or whether further documentation is required.

2.    Application
Automating the loan application stage with self-serve technology reduces the need for your staff to assist applicants and standardizes the process for consistency across all borrowers. 

3.    Application processing
Using a well-designed loan origination system can instantly flag any applications with missing information and return these to the applicant to be amended. This removes the need for one of your team to assess the application for any missing fields and ensures all applications are compliant.

4.    Underwriting 
A credit scoring system uses automation to help you assess an applicant’s credit score, risk, and borrowing potential. You can even adapt your underwriting guidelines based on different products in your range. 

5.    Credit decisioning 
You can use low-code technology to automate responses once a credit decision is reached. You could instruct your system to adjust the loan amount or interest rate if the applicant doesn’t meet the criteria for their application. Establishing these rules also ensures a consistent, unbiased approach is taken to all decisions. Alternatively, you could retain manual control over decision-making, and simply use automation to give you clearer visibility into all aspects of the application. In practice, most organizations do a mix of both, such as using automation to manage simpler decisions while retaining manual control over higher-risk decisions.

6.    Quality check
By using automation in the previous five steps to ensure consistency and uniformity, it will be easier for your team to analyze the application for quality control. Automation can even help them assess the application against internal and external rules and regulations before it is sent to funding.  

7.    Funding
Automation can play a key role by releasing funds as soon as a loan is approved, or on an agreed date. This gives the applicant visibility into when the funds will arrive and takes the pressure off your team, freeing them up to focus on other tasks.

Discover how Bizagi's low-code platform can transform loan origination:

Increase productivity, visibility, and compliance

Automation can help speed up the loan origination process by removing time-consuming manual processes still in use by many lenders today. These paper-based processes slow down decision-making, increase the risk of human error, and can turn off your customers. 

Using low-code technology throughout your loan process gives you increased visibility into all applications, risks, and opportunities to enable better decision-making. With this insight, you can make informed choices to help your business prepare for the future. 

Finally, maintaining compliance is one of your biggest responsibilities. You can get peace of mind by introducing powerful software solutions that can actively monitor compliance, fraud, and other risks. It’s easy to update the process in line with regulation updates, so you never have to worry about falling behind again. 

How to optimize your loan origination process

Low-code technology can help you overcome loan origination process challenges and drive long-term success. Bizagi has helped many banks to automate loan processes. Find out more about Bizagi’s Banking Solutions.

Before you go, get your free copy of our Essential Guide to Modernizing Banking Operations. You’ll find key insights for IT and Operations leaders looking to improve customer experience, boost back-office efficiency, and protect the bank. You’ll also see how other banks are transforming right now.