Business process automation (BPA) replaces inconsistently-executed manual activities with consistently-executed workflows and decisions. The result for financial services providers: Lower processing costs. Banks evaluating business process automation companies should look for the following capabilities to improve lending efficiency.
The Quick Takeaway
|What to Look For||Why You Need It|
|Integration with innovative lending services||Accelerate loan decisioning, improve decision quality and consistency, reduce fraud, and increase capture rates.|
|Business process analytics for banking||Monitor loan origination processes at the macro and micro levels to continually improve efficiency.|
Business Process Automation Companies: Hiring Criteria
These capabilities set the foundation for improved lending efficiency—and they can work as selection criteria for hiring business process automation companies. If you look for firms experienced in these areas, you get one that can help accelerate loan origination, improve decision quality and consistency, and position you for continual business process improvement.
#1 Cloud-Based Software Provides the Foundation
A cloud-based loan origination solution offers three distinct advantages:
- Easy deployment across corporate and branch office desktops;
- Frequent updates that introduce new functionality and performance improvements; and
- Easy integration with cloud-based lending services that enhance a bank’s ability to automate lending decisions.
Cloud solutions provide the foundation for innovative improvements in business process automation.
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#2 Integration With Cloud-Based Lending Services
Cloud-based lending services that easily integrate with a cloud-based loan origination solution help banks make better, faster lending decisions. The best business process automation companies offer products that integrate with services such as:
- Alternative credit data sources are histories of employment, address changes and utility, mobile phone, and rental payments that give lenders a more detailed and accurate understanding of an applicant’s ability to meet payments; especially those applicants with thin or non-existent credit histories.
- Trended credit data provide up to 30 months of tradeline payments to indicate how an applicant’s financial standing may be changing. Assuming an increasingly greater monthly balance without the ability to pay it off indicates declining financial strength. Similarly, paying down an outstanding balance over the course of 12 months indicates improving financial strength.
- Machine learning-based credit models draw on a wide range of bank data to predict creditworthiness, propose optimal loan terms, and confidently increase approval rates while minimizing chargeoffs.
- Fraud analytics uses advanced machine learning to flag loan applications that contain false or misrepresented information. Inaccurate information may include false identity, higher-than-actual income, or fabricated employment records.
- eContract and eSignature eliminate the printing, handling, and posting of paper documents. They email contracts within seconds of loan approval and enable quick digital review and confirmation.
Each of these services can be incorporated into loan origination workflows that automate the call to the service and return results. That data helps determine approvals or declines, spot suspected fraud, or create digital contracts matched to credit policies. Often it’s all done without the need for underwriter intervention.
#3 Business Process Automation Analytics
Cloud-based solutions and integration with a wide range of innovative lending services accelerate the speed and improve the quality of a bank’s loan origination decisions. Integrated analytics build on those capabilities and enable continued business process improvement. With analytics, a bank can monitor and evaluate business processes at the macro and micro levels.
- Compare week-to-week, month-to-month, quarter-to-quarter application volumes to evaluate seasonal demand and plan for optimum staffing;
- Evaluate individual underwriter turnaround times based on time between application arrival and an approve or decline decision.
- Track overrides by underwriters to determine if these decisions increase lending risk or demonstrate savvy underwriting skills;
- Analyze types and sources of fraudulent applications for common attributes;
- Monitor auto-decline and auto-approval ratios based on credit scores, sources of data used, or any other borrower attributes of interest; and
- Identify process bottlenecks that can be eliminated by replacing manual decisions with automation, decision rules, or cloud-based lending services.
Modern loan origination solutions generate tons of data. Integrated analytics turns it into insight—and an ever-more efficient lending process.
defi SOLUTIONS welcomes the opportunity to discuss how the latest innovations in cloud-based loan origination software and services can improve lending efficiency. Get your questions answered by our business process automation software experts. Start by contacting our team today or registering for a demo of defi LOS.
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