Community banks have a significant advantage over national banking providers. Deeply ingrained in the financial interests of the communities they serve, they understand the local economic environment and can tailor services to it.
Community banks can’t rest on their laurels and assume they’ll maintain a local advantage. Just as nationwide banks are looking for ways to continually improve process efficiency, savvy community banks are pursuing similar goals.
High-volume, repetitive processes such as originations for auto, home, marine, or recreational vehicle loans are ideal candidates for increased efficiency through automation. In years past, many community banks implemented workflows of some kind to improve the efficiency of this process. Today, community bank lending workflow solutions provide a more sophisticated level of automation, executing lending decisions that previously required human expertise. These solutions are easier than ever to implement.
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Cloud-Based Lending Workflow Is Easy To Implement
Earlier loan origination workflow solutions required extensive implementation time and expensive customization. Modern cloud-based loan origination solutions can be implemented in a fraction of the time, and lending professionals can easily customize community bank lending workflows via configuration menus.
Many community banks will also find the cloud approach provides a higher level of data security while reducing operational costs associated with IT infrastructure. For community banks seeking to improve the efficiency of their lending workflows, the cloud offers a compelling solution.
“Cloud-based loan origination solutions can be one of the most direct routes to improved community bank lending workflow efficiency.”
Equally important are the capabilities a cloud-based workflow solution offers to reduce lending risk. Configurable decision rules and a wide range of cloud-based lending services facilitate consistent, well-informed lending decisions.
Decision Rules Accelerate Loan Origination Workflows
Decision rules drive lending workflow efficiency. Rules can evaluate applicant data according to credit policies and direct process flow, replacing many time-consuming processes currently done by loan officers. This makes the community bank lending workflow more efficient by:
- Automatically evaluating applicant attributes against credit policies to arrive at risk-adjusted terms in seconds
- Ensuring all documents required by federal and state regulations are automatically generated and sent to the borrower
- Verifying the applicant has provided required information per any stipulations associated with conditional approvals
Decision rules can be implemented by lending professionals using intuitive configuration menus to drive workflows tailored to the unique needs of the bank. A community bank often can reply to loan applications within seconds by using decision rules.
Auto-Structuring Supports Sophisticated Decision Rule Uses
Decision rules can also support sophisticated lending decisions. When an application initially fails to match credit policies, auto structuring uses a waterfall looping process, incrementally modifying terms and applying decision rules to match credit policies. If a match is made, the workflow can structure a risk-adjusted deal, including stipulations, if necessary. Without a match, the workflow initiates a decline, with decision rules ensuring that any required documentation is included.
Auto structuring allows community banks to automatically evaluate loan applications and find a way to offer loans that may otherwise have been declined.
Cloud-Based Lending Services Reduce Risk
Modern cloud-based loan origination solutions further boost lending efficiency by allowing community banks to incorporate a wide range of lending services to significantly reduce lending risk and bring greater consistency regarding decisions. These pre-integrated cloud-based services can include:
- Alternative credit data sources that provide a more detailed and accurate understanding of an applicant’s financial standing to help qualify more applicants
- Analytics to identify misrepresented information indicative of fraud and avoid lending risks
- Valuation services that provide accurate estimates of current vehicle value
- Machine learning-based credit models that increase loan approval rates without increasing risk
Community banks can choose from dozens of different cloud-based lending services to boost the workflow by providing automated access to a wide range of data sources and services. Automated access to detailed information regarding applicant financial standing and powerful algorithms enable faster, consistent decisions that minimize risk.
Greater Efficiency in Community Bank Lending Workflow
Cloud-based loan origination solutions can be one of the most direct routes to improved community bank lending workflow efficiency. Greater automation, decision rules, and a wide range of pre-integrated services give community banks the ability to make lending decisions that benefit the bank and the community.
defi SOLUTIONS provides configurable loan origination solutions to help community banks improve lending efficiency and decisions. If you’re looking to sustain your competitive advantage in the communities you serve, take the first step in realizing the benefits of cloud-based loan origination. Contact our team today or register for a demo.
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