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August 4, 2021

How to Create an Automated Loan Origination Process System

Automation helps to eliminate inconsistencies and streamline processes. It standardizes the execution of tasks in your organization. Automation can also help you draw correlations between different sets of data for insight into how you can improve your processes. 

Automation helps lenders reduce processing costs, the likelihood of human error and improve the overall experience. Drawing correlations between credit scoring and recent credit inquires provide a holistic portrait of your members’ financial health.  

Automation can help improve almost every step of the lending process. Here we take a look at the first step, loan origination, and how automation can improve it.  

Automation in lending

Automation is any system that minimizes human input on the accomplishment of tasks. In lending automation

Automation in the lending process can:

  • Capture and index data from documents efficiently using a set of rules
  • Route documents accurately
  • Improve speed of lending process through email reminders and notifications generated at key points of the process. 
  • Synchronize data 
  • Leverage predictive analytics for the smaller-scale unprecedented loss

Automation provides open data flow at any stage of the loan process. It speeds up the process while at the same time providing you with more reliable indicators of risk and opportunity. 

How does automation improve the loan origination process?

Improving the loan origination process looks like this:

  • Process efficiency
  • Informative communication
  • Accurate risk assessment
  • Faster, more efficient underwriting
  • Faster, unbiased decision making

When you improve your loan origination process you improve customer satisfaction while increasing your pool of loans. 

Make decisions faster

Manual copying, emailing, scanning, printing, and data entry bog down the approval process. These tasks are time-consuming and have a high potential for error. In fact, the typical loan origination package averages 400-500 pages and can take over a month to process. Delays in the approval process can be costly.  

Automation of these processes decreases the amount of time it takes to complete the approval process. In doing so you gain the potential to generate more loans in less time as well as save money. 

Accuracy in effective communication

Certainly, you want to have a human agent available to assist each of your members. But, automating parts of your customer communication during this crucial period in the lending lifecycle can reduce the margin for human error during the loan origination process. 

The list of documents necessary to begin the loan origination process can belong. Automating email and SMS messaging helps to ensure there are no gaps in information conveyance. Templates ensure the gathering of these documents is as easy as possible. Including things like checklists help speed up this process. 

Credit risk evaluation

Predictive analytics have made their importance known across industries including lending. It leverages machine learning, big data, and statistical techniques to estimate the likelihood of behaviors and events. 

Loan origination can leverage predictive analytics and automation to evaluate the risk of lending. You can make informed decisions about whether or not to add new members or issue funds. 

 Automation also streamlines the risk evaluation process. Analysis of input takes a significantly shorter amount of time than the same job done by loan officers. 

Underwriting

Underwriting loans involves a lot of data processing work. Automated document digitization lets you process this data much more quickly and efficiently. 

Automation can look at a lot of data at one time. More information can help underwriters understand whether or not someone is likely to default on loan repayment. This helps them make an informed decision about their application. 

Making the decision

The ultimate decision whether or not to proceed with disbursing the funds should be an unbiased decision. 

Many lending agencies now face the backlash of racist and biased lending practices in the past. It is in your best interest, both socially and fundamentally, to do everything you can to ensure you are not engaging in biased lending practices. 

Automation can assist. It works by making rule-based decisions, taking only the data entered into the account. 

What’s more, automation takes all relevant information into consideration and gives it the appropriate weight in making your decision. Algorithms allow your automated system to process this data to make an informed lending decision.

A robust portrait of the customer

Automation can help identify and track more variables to build a more holistic and robust picture of your members. It helps you make informed decisions with more accuracy and speed. 

Borrowers are looking for fast, seamless, and hassle-free loans that are accessible on demand. Lenders need to make accurate assessments to mitigate loss. 

Automation makes the loan origination process easier than ever. You can make decisions with confidence and give your members great service.

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LiveVox (Nasdaq: LVOX) is a next-generation contact center platform that powers more than 14 billion interactions a year. By seamlessly integrating omnichannel communications, CRM, AI, and WFO capabilities, the Company’s technology delivers an exceptional agent and customer experience while reducing compliance risk. With 20 years of cloud experience and expertise, LiveVox’s CCaaS 2.0 platform is at the forefront of cloud contact center innovation. The Company has more than 500 global employees and is headquartered in San Francisco, with offices in Atlanta; Columbus; Denver; New York City; St. Louis; Medellin, Colombia; and Bangalore, India. To stay up to date with everything LiveVox, follow us at @LiveVox or visit livevox.com.

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