CRITICAL POINTS IN THE END-TO-END LENDING PROCESS & HOW THEY ARE CHANGING

Today’s financial technology (fintech) has helped relieve lenders of manual financing processes, decreasing delays and eliminating human error. The finance industry uses technology to simplify applying for a loan while reducing approval times to minutes. Cloud-based software has provided lenders greater flexibility while allowing them to scale their operations as needed easily. Automating the end-to-end lending process makes it easier for borrowers and lenders by making operations more efficient, speeding up decision-making, and enhancing customer experience.

Steps in the Automated End-To-End Lending Process
Step	Description	defi Solution
Loan Originations	Automating the loan origination process includes everything from the customer’s initial loan application to the point at which funds are dispersed.	defi ORIGINATIONS
Underwriting and Risk Assessment	Loan underwriting automation helps lenders better evaluate and manage risks.	defi ORIGINATIONS
Loan Servicing	Automating loan servicing lowers costs and makes the end-to-end lending process run more smoothly.	defi SERVICING; defi MANAGED SERVICING
Collections	Automating the collections process enables lenders to keep abreast of accounts more efficiently and with less error.	defi COLLECTIONS

Steps in the Automated End-To-End Lending Process

Fintech companies have been integral in automating the end-to-end lending process, leveling the playing field for lenders of all sizes. Many consumer lenders now rely on digital lending platforms that make the critical points within the process easier and simpler for consumers while also enabling better vetting of borrowers. With these new digital tools, automating most of the end-to-end lending process, including loan originations, underwriting, risk assessment, loan servicing, and collections, is possible.

Loan Originations

Arguably, nothing is more essential to automate in the end-to-end lending process than loan originations. It includes everything from the customer’s initial loan application to the point at which funds are dispersed or the loan is declined. As such, digital origination platforms need to be simple to use for applicants while also being easily configurable for lenders.

Origination software should offer the following:

• Automated approval process that backs human decision-making with data. 
• Automatic email or text communications sent out when a specific event occurs or is about to happen, such as past-due notifications, payment reminders, interest rate changes, or other triggers.
• Data analysis capabilities that enable more reliable credit scoring. 
• Forms that are specifically tailored for the loan product and which can be easily adjusted to meet regulatory requirements.
• Online applications that are easy to use, enabling borrowers to edit and verify their details quickly.

Above all, loan origination platforms must be up-to-date, user-friendly, and flexible.

defi’s Originations Solutions

defi originations solutions take advantage of new technologies and the latest digital architecture. As a partner in the end-to-end lending process, defi originations platforms look to meet the needs of borrowers while making decisions easier for lenders. defi includes the following features:

• Easily customizable
• No-code configuration capability for workflows, rules, policies, features, and the decision engine 
• Automated decisioning and funding 
• Developing and modifying integrations instantly via application programming interfaces (APIs)
• Fast implementation of business decisions
• A modern user interface (UI) that focuses on user experience (UX) and personalizes navigation
• Support for complex pricing matrices and models

A lender can differentiate itself in the competitive lending landscape by leveraging defi technology, such as automated decisioning, alternative data sources, personalized lending experiences, and seamless integration.

Underwriting and Risk Assessment

Automation used in underwriting loans helps lenders better evaluate and manage risks. This reduces the chance of future defaults, improving yield within a lender’s portfolio. As each lender often has its criteria for credit scoring, such automation needs to be readily customizable.

To approve, deny, or send back a loan application, these automated systems analyze the vast amount of data gathered during the application process. Even though humans still need to make the final decision, automation helps provide decision-makers with the data and insights to make informed decisions.

defi’s Underwriting and Risk Assessment Solutions

Data-centric solutions are particularly useful when underwriting a loan. The amount and quality of data available today help lenders make better decisions, though this requires incorporating this data into the underwriting process. Lenders can more easily verify identity and consider alternative credit information by utilizing commercial, customer, and industry data sources.

Automating underwriting services allows lenders to:

• Create tallies for applicants that offer precise and comprehensive information.
• Lower the risk of identity fraud. 
• Mitigates risk that could jeopardize compliance efforts. 
• Provide a record of communications between lenders and their customers that can be easily reviewed. 
• Set up loan terms that reduce risk for both the borrower and lender.

The services and data sources pre-integrated into a loan origination platform allow lenders to access relevant data automatically while underwriting a loan. Automating this portion of the end-to-end lending process also helps lenders meet regulatory requirements by using hard data to drive decision-making.

Loan Servicing

Automating the servicing of a loan lowers costs and makes the end-to-end lending process run more smoothly. While tracking customer communications should be done throughout a loan’s lifecycle, collecting data on customer contacts during this period will help the lender retain customers. Automated servicing solutions should keep a detailed and easily accessible log of all a customer’s interactions with the lender, along with information like the borrower’s payment history.

Digital statements sent out automatically to a borrower are much less expensive to store, while utilizing cloud-based databases also makes them more secure. Additionally, automatic updates by credit bureaus keep lenders abreast of any changes to borrowers’ credit scores. This allows lenders to offer additional add-on services that are relevant to their customers or to be able to mitigate challenging situations that could lead to default. 

defi’s Loan Servicing Solutions

The solutions defi offers for servicing allow lenders to automate many core functions while also providing expertise in managing customer relations. As a third-party provider of managed servicing, defi combines its expertise with intuitive digital tools to streamline lenders’ operations. 

The servicing solutions defi offers include:

• Managed servicing that includes customer care functions handled by defi’s experienced personnel allow lenders to deal professionally with complaints and fulfill customer requests. 
• Handling customer accounts through the use of automated tools for workflow management. 
• Managing accounts through the performance of closeouts, maintenance of general ledgers, posting payments, and sales functions.  
• Overseeing functions like balloon payments, closing out leases, managing titles, and remarketing vehicles for auto loans.

A holistic loan servicing strategy that includes managed servicing simplifies the entire end-to-end lending process for borrowers and improves your bottom line.  

Collections

When borrowers are notified about forthcoming or delinquent payments, they’re less likely to default on a loan. However, using automation to conduct this part of the end-to-end lending process allows lenders to keep abreast of accounts more efficiently and with much less human error. This also allows lenders to focus on growing their portfolios rather than collecting debts. 

defi’s Collections Solutions

When defi approaches automating default-related tasks like bankruptcies, collections, and repossessions, it does so with the support of several expert partners. Partnerships assist defi with providing lenders with services that include inspections, repossessions, vehicle grounding, and monitoring for bankruptcies and deceased borrowers. 

Future defi Solutions for the End-To-End Lending Process

The products and services that defi SOLUTIONS provides help lenders serve their customers throughout the lifecycle of a lease or loan. These end-to-end lending solutions satisfy borrowers by providing service quickly and efficiently while enhancing trust between lenders and their customers. Able to supply hardware, software, systems, and support for business processes, defi helps lenders establish more robust relationships between lenders and their customers.

As a trusted brand within the automotive and consumer lending sector, defi SOLUTIONS looks for ways to make the end-to-end lending process quicker while helping lenders scale and speed their operations. Continuously innovating, defi looks to provide an increasing number of products and services to simplify the end-to-end lending process further. Along with its state-of-the-art origination and servicing platforms, defi does much more than just provide fintech services. It also has the expert personnel to make the most of these digital tools with its managed servicing. Offering flexibility and scalability in its solutions, defi gives lenders the tools they need to compete in today’s rapidly changing lending environment.