If you’ve ever considered the importance of mobile lending technologies but haven’t acted on it, recent events should be moving you to take action. Now more than ever, lenders need a mobile or no-contact loan or lease originations strategy to not only survive the current climate, but also to thrive during the future upturn. Here’s how no-contact loan or lease originations will help grow your portfolio.
Trends That Can’t Be Ignored
An exponential number of consumers expect frictionless, no-contact transactions. Wireless technology has made mobile commerce nearly ubiquitous, bringing new products and services to areas previously dependent on face-to-face transactions. With evolving borrower habits and requirements moving to predominantly digital, lenders cannot ignore the growing trend of consumers expecting on-demand transactions anytime, anywhere.
To meet this expectation, your no-contact loan or lease originations solution should:
- Be available on leading mobile devices and platforms.
- Provide an easy and intuitive application experience.
- Digitally capture supporting documentation like a driver’s license, pay stub, or proof of residence.
Lenders who offer no-contact loan or lease originations have a distinct competitive advantage in the current market. You’ll engage a greater number of borrowers during a time when they are highly motivated to obtain financing.
No-Contact, Completely Digital Loan or Lease Originations Accelerate Decision-Making
Just as consumers expect no-contact transactions, they also expect rapid results. With mobile devices, you can order hundreds of products in less than a minute. Although loans are more complex, the expectation of a near-instantaneous transaction remains.
Lenders that can rapidly evaluate applicant credentials, offer risk-based terms,
Technology is key to rapid decisioning. Behind the scenes, lenders need automation and integration with innovative cloud-based lending services that possess the following attributes:
- Stipulation upload that informs the borrower of any required funding documents and allows them to capture and send those documents on their mobile device.
- Workflows that virtually eliminate the need for an underwriter to review applications.
- Decision rules that consistently apply credit policies to applicant credentials in order to accelerate underwriting and maintain compliance.
- Auto-structuring that automatically and iteratively modifies the terms for applications that initially failed credit policies with the goal of reaching a deal structure acceptable to both the applicant and lender.
- Services that collect additional information regarding an application’s qualifications, including:
- Making automated calls to bureaus.
- Obtaining trended and alternative credit data, employment and income verification, and vehicle valuation.
In the best cases, these capabilities can evaluate an application in seconds and return a decision. Applicants with exceptional and very good scores are the easiest to evaluate and offer competitive terms.
Automation and Data Deliver New Lending Opportunities
The combination of automation and specific data services can also accelerate decisions for all other credit tiers and increase lending opportunities.
- Trended credit data may show that an applicant’s financial position is better than their credit score indicates, allowing lenders to offer a deal with better terms and improve the chances of booking the loan or lease.
- Alternative credit data can compensate for applicants with limited credit history, allowing lenders to extend credit that may have otherwise been declined.
- Employment and income verification and vehicle valuation give lenders greater confidence in granting credit and structuring deals.
It would be unrealistic to assume that automation will handle all no-contact loan or lease originations without the need for underwriter intervention. There will certainly be applicants with attributes that require an experienced underwriter’s review. Nonetheless, workflows and decision rules can still accelerate the decision process, carrying out initial evaluation and then routing exceptions into the appropriate queues for underwriter review.
Don’t Spend Time on Applications That Don’t Match Credit Policies
And, of course, there will be applicants who simply do not match credit policies. Automation and decision rules can generate auto-declines, assign the reason, create the correspondence, and send an electronic response—all without the assistance of an underwriter. With this method, you’ll have a digital record of the decision and reason for reference should there be any questions regarding regulatory compliance.
Seal the Deal With eSignatures and eContracts
You’ve made the no-contact loan or lease originations process as easy as possible. You’ve impressed the applicant with a rapid, competitive offer. What more can you do? You can further increase your chances of capturing the loan or lease with the implementation of eContracts and eSignatures. The ability to immediately review contract terms and sign it electronically provides additional incentive to accept the offer.
No-Contact Loan or Lease Originations Facilitate Portfolio Growth
No-contact loan or lease originations give lenders every opportunity to reach more borrowers and rapidly respond to qualified applicants with risk-adjusted deals. They enable a completely digital process, allowing lenders to take advantage of the latest innovations in automation and cloud-based lending services to efficiently respond to a greater number of applications and increase the likelihood of capturing loans or leases.
defi SOLUTIONS provides configurable loan or lease originations systems, loan or lease management and servicing, analytics and reporting, and a wide range of technology-enabled BPO services. If you’re in need of a mobile, no-contact loan or lease originations solution, take the first step by contacting our team today or registering for a demo.