loan origination software for banks


The defi Team defi INSIGHT, Originations, Simplifying Processes

loan origination software for banks

The world of auto lending is changing at an accelerated pace. Between pandemic-driven chip shortages and the increasing demand for mobility, lending institutions are turning to advanced loan origination automation for a solution. The best loan origination automation software helps lenders manage their processes more efficiently and effectively. It also helps potential borrowers get approved quicker and with less hassle.

What is Loan Origination Automation?

Loan origination automation is the process of automating the manual tasks that a loan officer or underwriter typically performs during the loan application process. In contrast to traditional manual loan origination, which relied on human effort and paper processes and could take days to complete, modern software allows for a lease or loan to be approved in just seconds.

While automation is not a new concept in the lending industry, as technologies change, loan origination automation is lightyears ahead of where it was ten years ago. The difference between legacy systems and modern systems are vast, lenders with updated automation features benefit from reduced operational costs and improved efficiency. Another significant benefit new systems provide is helping lenders keep up with consumer demands for instant decision making. 

The Benefits of New Automation Technologies

The general benefits of automation usually include increased efficiency and accuracy. But, when it comes to implementing new automation technologies in your lending business, the best solutions can offer improvement to every step of the loan origination process, including:  

  • Greater insight into the performance of your lending process with analytics. This includes configurable dashboards and pre-loaded reports detailing your current deal quality, application performance, and more.  
  • Better lending decisions with alternative data include a wide range of transactional data, so lenders get a more comprehensive picture of an applicant’s creditworthiness. Alternative data is crucial for expanding lending opportunities to borrowers who wouldn’t qualify based on their credit score alone. 
  • Key integrations with data providers for automatic access to industry-leading credit, identity, or alternative data sources.
  • A reduction in fraud risk with machine learning algorithms that have built-in fraud detection and identity verification. This includes point of entry algorithms which stop fraudulent applications before they can even be processed. 

The Steps to Begin the Implementation Process 

Every lender has their own unique procedure. Your lending process is based on your portfolio performance, market dynamics, success, and the specific laws and regulations you’re required to comply with. This means that your loan origination automation system needs to be able to scale with your business. The problem is that outdated legacy systems require programming expertise for even minor modifications. They also can take months to implement those changes. The lender is also entirely responsible for hardware selection, installation, maintenance, and upgrades. When it comes time for an upgrade, the only option is to start a brand-new LOS development project, upgrade an existing solution, or integrate an amalgam of disparate enterprise foundational components.

On the other hand, modern cloud-based systems are highly configurable and use configuration menus (mobile UX, workflow, queueing, security, scorecard, pricing, 3rd party integration, stipulations, and verifications.) which means modifications can be done by authorized lending professionals in just a few minutes. They have a rapid time to market, and the vendor is responsible for the hardware selection, installation, maintenance, and regular upgrades.

Customizable, Pre-built Integrations For Your Unique Lending Process

Modern, configurable systems have advanced automation to keep up with the current market and the flexibility to keep up with future operational needs. With this configuration approach to build or update your origination solution, you are working from configurable blocks and building a single platform as your foundation. 

Some of the best pre-integrated capabilities you should consider when you’re searching for a vendor to help you configure your loan origination automation system are:

  • Alternative credit data
  • Vehicle valuation
  • eSignatures
  • Fraud analysis
  • Credit bureaus
  • Dealer management systems
  • Identity, income and employment verification 
  • Digital document capture
  • eContracts

You’ll be able to customize your foundation with all the pre-built integrations and tools to meet your unique lending process. Not only does modern software accelerate your time to market, but it will also lower your total cost and give you a loan origination system that’s easy to modify. 

Getting Started 

defi SOLUTIONS provides modern, flexible solutions, for the end-to-end lending lifecycle that provides all the foundational loan origination automation components you need. You can build a successful solution with lower costs, faster delivery, and stamp your brand in the industry. Contact our team today or register for a demo.

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