Business process automation has helped the banking industry bring efficiency to high-volume processes. It brings speed and accuracy to account openings and closures, credit card applications, and loan originations. Recent fintech innovations are transforming the loan origination process with lower processing costs, better quality, and consistency in lending decisions—and lower risk.
Mobile apps, integrated analytics, automated decision rules and fraud detection are some of the latest innovations to improve business process automation in banking. Banks still using legacy loan origination solutions have the most to gain from updating to software that uses business process automation. Let’s take a quick look at some of the main benefits.
Business Process Automation for Bank Loan Origination
Mobile, Paperless Loan Applications
Millennials live digitally, and adoption of mobile devices by other generations increases. Banks that offer loan origination via mobile devices are meeting the expectations of the demographic that already conducts the majority of its business transactions on mobile. Banks can’t afford to ignore the mobile lending opportunity.
Mobile loan origination is optimized to efficiently capture the required applicant data, including supporting documentation. It digitally submits an application for immediate review by the lender. In the current lending environment, mobile, paperless loan applications can make the difference in originations.
Decision Rules Bring Speed and Consistency
Decision rules bring greater efficiency and consistency to business process automation in banking. Decision rules replace repetitive yet critical decisions made by underwriters, who may then use their time and skill where it’s truly needed. Decision rules accomplish in milliseconds what can take an underwriter minutes. Over the course of thousands of decisions, those minutes add up. Decision rules also eliminate inconsistencies in evaluating applicant attributes and structuring deals, thereby improving decision quality.
Fully-Integrated Analytics Identify Process Inefficiencies
Modern loan origination solutions generate volumes of data that can be analyzed to continually improve the loan process. Loan origination solutions that include fully-integrated analytics let lending professionals identify potential process improvements. Lenders can use dashboards and reports to identify trends and delve into the details. With the ability to analyze nearly every aspect of the loan origination process, lenders can:
- Identify manual tasks that can be replaced by decision rules to improve process efficiency and consistency;
- Discover bottlenecks related to underwriter inexperience and propose appropriate training; and
- Evaluate historical application volume and process trends to anticipate future needs and plan resources accordingly.
Analytics uncover process details that would otherwise be ignored. To get the most from business process automation, banks need to ensure analytics are part of their loan origination solution.
Fraud Analysis Recognizes and Reduces Risk
The downside of a digitized economy is the increasing volume of fraudulent activity that threatens corporate financial resources and reputation. Fraudulent loan applications are on the increase in part because it’s easy to misrepresent applicant credentials. False identities, fabricated income, fake employment statements, and inflated collateral valuations are all clear indicators of fraudulent applications likely to result in defaults.
As part of the loan origination workflow, business process automation can coordinate a call to a cloud-based fraud analytics service to determine the likelihood that an application contains fraudulent information. In seconds, the service returns a fraud score and whether fraud is suspected. Based on that information, the bank can automatically decline the loan or move the application to an experienced underwriter’s queue for further evaluation and decisioning.
Banks get an instant win when fraud analysis is integrated into the loan origination process. With immediate identification of fraud, there is no waste additional time on loans likely to default. That reduces overall loan processing costs and portfolio risk.
Business Process Automation for Banking: Where to Begin
Business process automation in banking improves efficiency, decision quality, and consistency while reducing risk. Banks with legacy lending software should look into modern, cloud-based loan origination solutions.
Getting Started
defi SOLUTIONS loan origination and analytics software experts specialize in business process automation in banking. Learn how you can achieve greater efficiency and reduce risk by contacting our team today or registering for a demo of defi LOS.
