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WHICH LOAN ORIGINATION AUTOMATION ACTIVITIES OFFER THE MOST OPERATIONAL VALUE?

The defi Team auto loan origination software, Automation, defi INSIGHT, Loan Management, Loan Origination Software, Simplifying Processes, Technology

Auto loan application approved with a dollar and coins laying over it.

Automation is not a new concept in the lending industry. Lenders have been using it for years to save time, cut costs, and improve their business. With the help of automation, lenders can make faster, more accurate decisions and capture more loans that fit into their unique lending practice. Here’s a quick guide through the loan origination automation activities that offer the most operational value in regards to new lending technologies:

Loan Origination Automation Activities That Offer the Most Operational Value

The lending industry is evolving at a rapid pace. With the rise of modern loan origination platforms, outdated legacy models are becoming obsolete. These days, consumers are demanding more from their lending experience. The key to success in this industry is innovation. Lenders need to be able to adapt quickly to stay competitive.

The latest loan origination automation capabilities that offer the most operational value to lenders are:

Mobility

With the increase of cloud and mobile technologies, lenders can now offer their customers more convenient ways to apply for loans. These days, most people are looking to buy a vehicle without ever stepping foot into a dealership or bank. 

Because of this, mobile capabilities have become an essential part of the loan origination process. They allow lenders to use features like:

  • Custom drop-down menus 
  • Minimum/maximum values 
  • Data masking 
  • Rules
  • And others 

Which allows them to accurately capture applicant information and provide their borrowers with an easy step-by-step application process.  

Auto Structuring 

Auto structuring is a loan origination automation capability that offers a lending institution some of the most operational value. The process involves using algorithms to automate deal structuring using a lender’s unique business rules and workflows. Auto structuring can slightly adjust interest rates, require a larger down payment, or extend the loan term, to reach a favorable deal. 

Decision Rules

Decision Rules reduce errors in underwriting and processing loans. Decision rules are one of the most valuable types of automation in lending because they reduce the number of manual steps required to approve a loan request. It also helps in improving customer experience by reducing loan process time. In just seconds, rules can process decisions that would otherwise take an underwriter several minutes. This dramatically increases the probability of a loan capture. 

Alternative Data

Improve customer satisfaction through faster, more accurate decisions. Alternative data is an integral part of loan origination automation, as it can offer unique insights into potential borrowers. This type of data is not traditionally used in credit decisions but has the potential to be used in the future. It includes rental and utility records like mobile phone, gas, electricity, water, bank accounts, real estate ownership, and driving records. Combining standard credit data and alternative data gives lenders a more comprehensive picture. This results in better and more lending opportunities.  

Machine Learning

Machine learning makes it easier for lenders to eliminate fraudulent applications before they even start processing. With machine learning algorithms, new loan applications are filtered through a point of entry fraud analysis. These algorithms quickly identify obvious and hidden attributes that indicate fraud. Whether it’s a misrepresentation of income, employment, or identity theft, these fraud applications are quickly processed as defaults or delinquencies. 

Analytics

Analytics is another valuable loan origination automation activity for all lending organizations. With highly detailed reporting that gives you greater insights into your portfolio performance, you’ll be able to make more informed decisions.

Rapid Implementation of Modern Loan Origination Software

Modern loan origination solutions enhance the efficiency of nearly every step of a lease or loan origination process, from the application submission and decisioning to extending an offer to qualified borrowers. With the advancements in lending automation and cloud-based technologies, lenders can be more efficient and responsive to lending opportunities. 

These new systems allow you to customize your lease or loan software to reflect your policies and brand. The best lease or loan software providers will enable you to build with configuration menus. Knowledgeable and authorized business users can easily modify a wide range of software functionality from these menus. You can also tailor it to your unique business requirements.

Getting Started

defi SOLUTIONS provides a total end-to-end solution for lenders’ complete lending lifecycle that includes configurable lease or loan origination systems, management and servicing (by your experts or ours), analytics and reporting, and a wide range of the latest technology-enabled BPO services. If you’re struggling with the limitations of your current lease or loan origination automation activities, take the first step in realizing the benefits of modern technology. Contact our team today or register for a demo.

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