By: Siddharth Wadehra, QuickReach Head of Research
The lending business is a complicated one. Usually, in a typical month, an organization receives thousands of applications that need to be processed. It must be noted that while a large number of consumer applications need careful revision, only a small fraction of them actually suit your lending philosophy. Automation in these cases becomes extremely important as each of the incoming applications could already be screened effortlessly through pre-defined criteria; advancing the applications that best suit the criteria. Apart from just evaluating, automation can improve communication with the potential borrower in instances when further documents are needed.
The new-age automated B2B lending processing system has distinct advantages over legacy lending systems. Through the latest cloud technologies and automation suites, automated B2B lending processes can now be quickly implemented and easily configured. It efficiently provides superior customer experience, significantly improves decision-making accuracy and almost entirely eliminates paper documents. Replacing manual steps with automated decision rules, transforming paper into digital format, and gathering performance data electronically are bound to have an immense impact on all aspects of your lending practice. These would allow you to process a larger number of loan applications with existing resources. Not to mention, these eliminate causes of human error for faster, better-quality evaluation decisions and allows for reduction in delays associated with paper processes.
Finally, an automation system would allow your organization to establish repeatable and auditable processes that support compliance. The team would also be able to gauge loan performances with the goal of continuous profitability through the effective use of insights from data.
Superior Customer Experience
While advancements in automation and adoption of digital solutions have made so many daily transactions frictionless. One can purchase just about anything: buy and trade stock, deposit checks, and use mobile devices as door keys. As consumers, we have come to expect simplicity in all our transactions. However, one area in need of improvement is business lending. Even today, the perception among consumers is that the process of obtaining a business loan is complicated.
An automated lending system can dramatically change this perception by accelerating the entire process and making it as seamless as booking a flight ticket on your favorite travel portal. The proposed business lending process begins either on the website or the mobile app that the applicants can access anytime, anywhere. Automation and configurable menus guide the applicant through the entire process, prompting for the required information and providing information when needed to help them input the correct information. The flexibility and power of decision rules verify that the information has been entered correctly. Documents could be completely digitized and securely sent to the lender and smart OCR could help retrieve and route the information from paper documents to the database seamlessly.
When automation is applied to the application process, all requisite details are collected accurately in no time and are transmitted to the lender for a faster decision process. In the competitive business lending market, having a finance solution that helps provide a superior customer experience is imperative.
Understandably, digital automation can play a huge part in improving applicant evaluation and loan decision-making. It eliminates unnecessary manual steps and allows human expertise and experience to be applied in situations where it works best.
One scenario could include an initial evaluation of the application where decision rules automatically evaluate applicant attributes and could possibly provide instant loan approval for well-qualified applicants or decline applicants who have a poor credit history or might not fit the existing pre-defined criteria.
With the setting of decision rules for exception applications already possible via B2B lending automation, performing certain steps of the evaluation process can now be done automatically, leaving the more complex decisions to the experienced underwriters. Couple this with the ability to integrate the decision with existing credit data sources, the automation system can now help you aptly bucket the loan applicant which would help define the loan structure and terms. By removing any variation associated with human decisions, this structured approach would help streamline existing processes.
Not to mention, the team could avoid the menace of misplaced documents in this automated process. Paper documents converted to digital images extracted and securely stored in data records by the smart OCR in the automation suite would provide the underwriters with the available information in one place to make a sound decision.
Data and Analytics for Improved Profitability
As someone in the lending space, you probably appreciate the value of insights from analytics to the overall profitability of your organization. The automation process generates a large volume of data from the application, underwriting, and funding processes. Ideally, your automation suite should allow you easy integration with any external tool to help you make sense of all the data that is available on the portal. Apart from showcasing areas where your organization is doing well, it would also highlight areas that need improvement.
There are numerous areas where analytics can potentially be helpful. For example, analytics can indicate loan structures and terms that could reduce risk or could help analyze borrower factors that might have an influence on the borrower's performance. Data and analytics help you monitor your performance and identify areas that you would need to work on. In a cut-throat competitive lending marketplace, this could potentially be your edge over your competitors.
Automation decreases the manual work associated with each incoming application. This allows your organization to provide every incoming loan application a response. An automated loan processing system helps the team create a number of notification templates that are then populated with applicant- and loan-specific information. Not only is this a more effective method of communicating with your prospective customers, but it is also immensely beneficial in demonstrating regulatory compliance.
QuickReach: Your Way to B2B Lending Success
Automation is impacting the business workplace. In a lot of industries, effective implementation of automation suites has improved productivity, reduced costs and improved the quality and consistency of products and services. The B2B lending space is no different. To effectively compete in the b2b lending space, organizations like yours need to recognize the advantages of automation and its potential impact on business. Understandably, automation capabilities incorporated in these solutions would provide lenders with an immense competitive advantage.
QuickReach provides automation to B2B lending companies with pre-built workflow templates which would allow you to roll out your first digitized automated business lending process in a matter of minutes. Sign up for a free trial here or reach out to one of our customer success team members here to explore how to digitally transform your lending business.