Automation is a valuable part of many industries, but it’s showing particular value for the field of lending. Loan management software is an excellent tool to help businesses automate their financial processes. If you’re on the fence about letting the software take the reins, here are eight benefits of lending automation that might turn your ear.
1. Better use of time
Automation saves time on both ends of a loan, and that matters. When clients ask for a loan and know they qualify, they often want to access the funds as quickly as possible. Similarly, lenders wish to spend less time on repetitive tasks and improve performance by handling more work at a time.
Loan management software can help automate the most straightforward tasks, reducing the workload to a concise review of the results and, if necessary, a correction.
2. Enhanced fraud detection
People commit fraud for many reasons. Some are simply greedy, but others are looking for cash to start a business and don’t know about the many other options they could try. Either way, automation can help detect fraud by analyzing paperwork and calculating potential warning signs.
Humans are more likely to miss what appear to be minor errors, such as a name spelled slightly wrong on one out of dozens of documents. Machines will process this error the same way every time, alerting users for manual review to see if it’s actually fraud or a genuine mistake. Predictive analytics can also help calculate future risks from providing a loan.
3. Improved scalability
Automated lending software works equally well when processing multiple applications simultaneously. While it’s theoretically possible to overload the software, most lending institutions will never come close to doing so.
What matters here is that better scalability means lenders can adapt to meet the needs of peak lending seasons without sacrificing quality. This flexibility has numerous side benefits, including reduced training costs and less disruption if employees previously had to come in from other departments to help.
4. Consistent processing
Loans can involve as many as hundreds of documents before approval, originating on both sides of the desk. In many cases, processing this paperwork involves bringing it in from different sources and checking it against multiple resources to ensure accuracy and check for problems.
Loan automation software can do most of this work, handling each document the same way and adding a layer of predictability. Lending institutions can even modify paperwork to work with the software, further smoothing out the process.
5. More consistent workflows
Automation software can help lending institutions create better workflows for employees. There are too many variables in data entry, processing, assignments, document routing, and security analysis to develop streamlined processes for employees without software.
Automated systems can improve document collection and tracking, help notify people when they need to do something manually, and otherwise smooth out the entire process for employees. This streamlining allows employees to spend more time learning and mastering the skills they need, which means better performance across the department.
6. Higher customer satisfaction
A direct result of all the other benefits is higher customer satisfaction. Loan automation software is available 24/7 throughout the year, and it can even provide customers with an estimate of when they’ll be able to access their money. The highly predictable nature of these systems means customers can make other plans and make better use of their time, too.
Without automation, variables like seasonal holidays, increased workloads, lengthy approval processes, and even the weather can slow down applications and make it harder for customers to know when they’ll get that car loan or be able to close on a house.
7. Simpler auditing
Auditing is an integral part of managing a lending business. Simplifying the process, creating centralized information databases, and tracking activities help the auditing process and make it easier to detect and respond to risks. Automation software also removes some of the burdens of meeting regulations from employees because the software handles it.
More straightforward auditing also tends to mean faster auditing, which means employees can spend more time working on things that bring in money and less time proving they’re doing everything correctly.
8. Better competitiveness
Finally, loan automation software can help with competitiveness. Customers talk to each other, and if one of them has a bad experience with you, several more potential customers might avoid you. On the other hand, if getting a loan is fast and easy for consumers, they might recommend you to others and bring in more business.
Automation creates a clear distinction between lenders who use it and those who don’t. The result is that lenders who implement automation into commercial loans will gain customers that lenders who avoid automation lose. Automation will likely become an industry standard because no lenders will want to be without it.
Loan automation software is an excellent fit for lending companies. While no software is perfect, automation in lending is too valuable to avoid. The sooner your institution implements automation software, the better off you’ll be.