Steps of the Lending Process You Can and Should Automate on 2019

The belief that alternative lenders can’t compete with large-scale financial institutions simply isn’t true anymore. And one of the main reasons for it is technology. Big banks often choose to create their own custom solutions and support tons of legacy code. That’s where alternative lenders can gain a competitive edge by deploying an advanced LaaS platform that has all the functionality out of the box.

With TurnKey Lender, one can automate every step of the lending process. All that’s left to a business owner is to set up an effective website and take care of marketing. But there are still some common myths when it comes to what automation can and cannot do. And believing in these myths leads lenders to higher operational costs and more human error in the things that could be more secure and much faster have they been automated.

When we at TurnKey Lender say that all the steps of the lending process can and should be automated, we mean it. Just to show you an example, our platform takes care of the following:

  1. Loan origination
  2. Underwriting
  3. Collateral management
  4. Debt collection
  5. Loan servicing
  6. Reporting
  7. Supervision
  8. Regulatory compliance
  9. And much more. You can see for yourself in your free trial 🙂

And the great news is that with TurnKey Lender it doesn’t take huge investments to automate those tasks. But we’ll talk about that a little bit down the road. Most importantly, automating all of those steps helps lenders:

  • Reduce operational costs
  • Avoid human error
  • Improve user experience
  • Make loan processing almost instant
  • Simplify auditing and reporting
  • Streamline compliance
  • Focus on business development rather than software development

In this guide, we’ll go over each of those lending process elements and see which you should automate in 2019. And we’ll start with origination.

Loan Origination tasks that can be automated

Origination covers everything that happens between a customer submitting their loan application and the funds being disbursed or the loan being declined. So that’s quite a chunk of lending operations. And the steps to automate here are:

Automated application – the clients should be able to fill out all the forms online in their browser and device of choice. The form should be tailored for the specific loan product and depend on the jurisdiction’s local and international regulations.

Application processing – of course, pretty much any lender will want to involve a human being in approving loans. But the application processing should be automated to the highest possible extent. The key here is the proprietary advanced scorecard which should be available within the system to help loan managers make informed decisions based on its borrower evaluations.

Email communication – Of course, there should be an option for the client to get in touch with the real person at any moment, but why do manually what is better done automatically. There should be a customizable email template editor which would send custom emails to potential customers on certain triggers.

Loan underwriting – the right underwriting automation will include a proprietary credit scoring model that helps business reduce credit risk and improve portfolio yield. Lenders often have their own scoring criteria, which they should be able to add to the system, but the platform must have pretty advanced ones out of the box.

Loan decisioning – even though, there should be a way for a loan officer to manually approve, deny or send back loan application, the system should provide you with all the insights and analytics required to make an informed credit decision. And, if you want it to, it should be able to process the loans on its own.

Electronic signatures – everyone’s already used to being able to sign documents online safely. Obviously, when a lending operation goes fully digital, it should have seamless integration with some well-known e-signature software.

Loan servicing tasks to automate

Loan servicing is another sphere where automation can make loan manager’s life significantly easier. And it’s not just about the disbursing funds for the approved loans and monitoring the
repayments.

Digitalization of statements – the expensive and hard to manage paper statements should long have been automated and digitalized. Given that all the data is located online these days, that’s more than real.

Interaction tracking – all the interactions between the lender and borrower should be logged, collected, and easily accessible by the system admin. The data that should be automatically collected includes things like payment history and customer service queries.

Credit bureau data updates – the system should automatically sync with the credit bureaus to pull the recent data and update it for all the borrowers.

Payments alerts and reminders – the users should get automatic alerts reminding them about upcoming or overdue payments. As well as the lender should get alerts when there’s any potential for bad debt so that they could react accordingly.

Account management – users’ details and documents should update automatically each time status is changed or payment is overdue.  

Payment collection automation

Action planning – for each new client lenders need an easy way to set up a separate collection and action calendars. They may want to check in on it manually, but once the workload grows, the required actions need to happen automatically.

Write-offs – knowing that the write-offs happen automatically without manual action, frees lenders to focus on more important things. At the same time, the borrowers should receive notifications and alerts about the upcoming payment and be able to let the software perform automatic write-offs.

Collateral management

Collateral types, valuation, and revaluation – the system should be flexible enough for the users to submit their collateral and for the managers to have everything they need to work with these assets.

Automatic loan reporting

Portfolio, performance, risk ratings, collection ratings reports – to stay up to date and have a firm grasp on what’s going on with the company, lenders need all kinds of reports about their borrowers, loans, and risks. TurnKey Lender lending software will collect, process and format all the needed data to put together proper and easy to digest reports.

Regulatory compliance

Compliance might be the biggest head- and heartache of the lenders globally. With the laws changing all the time, it may be hard to adjust and keep track of all the updates. Advanced lending software, if integrated with the right compliance solutions, can make lender’s life all that easier by automatically controlling the borrower’s quality, collecting all the required documents and keeping business compliant from the start.

How TurnKey Lender does that for you

All of the lending tasks described above and much more is already realized in TurnKey Lender’s end-to-end tool suite. Origination, underwriting, collateral, servicing, collection, and reporting. Our software does it all letting you focus on finding the leads for the platform to process.

Many lending operations still do many of this work manually. Imagine the amount of time and money wasted. Not to mention, all the demographics that stay unserviced because of operational difficulties. By providing lenders worldwide with affordable, accessible and easy to use tools, TurnKey Lender works on achieving global financial inclusion. And with that in mind, our goal is to make lending fully automatic, freeing our customers to deal with other important things.

TurnKey Lender’s solutions are white-label (so you will be able to add your own branding), easily deployed from the cloud, secure and powered by the most advanced AI and machine learning algorithms.

One more benefit is our unique pricing model. Company’s income is based on the loan portfolio performance of our customers. This approach replaced charging clients per purchase of the software package. So for us, our client’s success means better profit and farther reach. This motivates us to stay deeply involved with your team and product, helping you reach new heights.

The gifs you saw in this post are from the TurnKey Lender’s end-to-end boxed solution which is made specifically to address all the needs of any kind of lending operation from the get-go. And if you want to go even further with your customization freedom, consider TurnKey Lender Enterprise. There are objectively no better lending solutions on the market right now. And we don’t stop, so that isn’t going to change any time soon.

If you aren’t using TurnKey Lender yet, do get a free trial. And if you’re already a client and would like to see if there’s anything else we could automate in your lending operation, feel free to get in touch with your personal TurnKey Lender manager. Either way, our team will be happy to show you around and demonstrate exactly how our tools will take your business to the next level.