Right from the time an application is received, and all the way until disbursement, a lot of data flows into the lending lifecycle. However, traditional lending management systems rarely make optimal use of this data.
By employing the right tools and analysing this data, it is possible for a lender to reduce the inefficiencies in the lending management process, and achieve a faster application-disbursement TAT. Additionally, it makes decision-making a lot more easier and effective, enabling the lender to service a larger audience, and also make the lending process a lot more intuitive!
The Advent of Modern Analytics
Until very recently, analytics was something that was too expensive and attainable only if you had the technical expertise, infrastructure and understanding built into your processes. However, the advent of technology has made things different.
Analytics can quickly be achieved without the need for complex infrastructure or servers and deliver capabilities to users whose primary function is outside the field of statistical analysis. Finezza’s loan lending lifecycle solution provides a managed analytical platform that offers you the ability to explore, analyse and ask why.
Without understanding data models or writing queries, your staff can quickly run reports that go beyond mere tables and uncover patterns to make well-informed decisions. From day-to-day operations to high-end strategic plans, gain the insights that help you govern your decision-making process.
Analytics for Success
Success starts with data. Understanding the data and deriving valuable insights is the first step to making more informed decisions and thereby walking down the road of success. With the rise of modern technologies like big data and artificial intelligence, analytics is an important aspect that you simply cannot overlook.
There is no use of generating volumes and volumes of data if there is no way to analyse and get benefited by it. Analytics provide a wealth of insight that can be used to improve your lending efficiency and profitability continuously.
Legacy auto lending solutions and using simple tools like Microsoft Excel and Access are not built for big data and analytics. Only a modern loan management software employing the latest fintech capabilities and having analytics at its core lets you truly benefit.
Analyse to Optimise
A modern loan management system like Finezza is valuable in two ways. First, analytics is tightly integrated throughout the loan lending lifecycle. Secondly, there’s no need to be a data scientist, find consultants or contractors or find in-house technical personnel to develop the reports you require.
You can rely on preloaded reports, build your own reports and customise preloaded reports to view any perspective you desire. Here are some quick salient features of Finezza’s Integrated Analytical Suite:
- Add New Reports on the Fly
- Data Aggregation and Quality Assurance
- Cost-Effective Development
- Quick Analysis of Data
- Drill Down into Data Behind any Report
- Customise Preloaded Reports or Build New
Why Do You Need Analytics for Lending Efficiency?
Analytics enable you to find areas of process inefficiency based on quantifiable metrics, identify underlying causes and implement solutions as an outcome. The ability to effortlessly capture, assimilate and monitor your data provides you with the competitive edge.
Here’s how you can benefit from analytics:
1. Advanced Loan Origination
Loan origination is the first leg of the loan lending lifecycle and analytics can be easily applied in this domain to improve its efficiency. Regular reporting and comparison of metrics in this leg will help you win new customers and drive leads to borrowers. Some beneficial analytics you can derive are as follows:
- Assess individual underwriter’s turnaround time or measure the average time between the application and the first major response generated which could be an approval, conditional approval, or decline
- Monitor the success of decision rules and report auto-decline or auto-approval ratios based on credit assessment
- Summarise weekly approval
- Compare customer target and acquisition ratios
- Keep track of metrics and compare month on month to track KPIs and improvements in performance
2. Streamline Credit Assessment Process
Determining the creditworthiness of borrowers is a vital component of lending success. In today’s lending environment precision is essential and timely response is critical when assessing counterparty risk.
If your process of assimilating and analysing borrower information to assign a credit score too manual or time-consuming, it can threaten lender margins on smaller loans. Backed by the expertise of our credit specialists, Finezza’s analytics solutions provide you with an effective means to aid in risk grading and performing financial spreading. Here’s how:
- Accurate risk grading to improve decision making
- Perform analysis from diverse data points and cross-verify information
- Set your own algorithm to analyse credit data and come up with a unique credit score to auto-approve or auto-decline loans
- Analyse a vast amount of data in a few minutes to gain the bigger picture
- Quick turnaround time with a faster response rate to assess creditworthiness
- Decipher trends on performing and non-performing data points along with identifying false positives. Trend analysis of fault positives and predictive analytical capabilities to identify loan scams
For most lenders in the business, it’s often cumbersome to analyse borrower information quickly and accurately. However, Finezza’s solution captures and analyses financials in a consistent manner and generates reports in the desired format of the company. This enables you to make reliable credit decisions.
3. Comprehensive Loan Management
Once the credit score is derived, the loan is approved and then disbursed to the applicant. After this process, it’s still important to track the progress of the loan. Loan payments need to be recorded and if the borrower seeks to expand their loan, then all the payment history needs to be verified.
- Tracking loan repayment month on month and identify misses
- Structure your loans and advances depending on the type of customer
- Generate disbursal advice and repayment deeds. Allow for rapid disbursement providing customers with access to funds quickly
- Providing a clear audit trail
- Collect repayments through digital channels and improve operational efficiency
- Track customer behaviour through the repayment information
4. Understand Loan Portfolio Performance
If you are not using analytics then you are probably doing guesswork. And, no, that’s not how decisions are made, are they? Alternatively, you might be using Excel or simple tools, but over time you will be hassled and are also less likely to conduct frequent and detailed analyses.
Well designed analytical tools that are natively integrated with your loan management system, will enable your capabilities limitlessly to analyse macro as well as micro performance and everything in between:
- Compare delinquency rates to determine trends and analyse what has contributed to the delinquency
- Scatter distribution of loans by product, age, geography, loan type, dealer and various other attributes that provide insight into portfolio segment
- Identify each portfolio’s KPIs and efficiency
- Assess loan officers and underwriter’s performance
- Uncover attributes of applicants who have high-end loans
Overall such analysis will help to determine the performance of loan portfolio and identify areas that need improvements. Without this insight, the attempt to improve your product performance will miss the mark and you will know where to focus your efforts.
Reporting and Analytics Benefits of Finezza
There’s no doubt that analytics open the doors to continuous process improvement based on lucrative insights and trends. Here are some of the benefits of using an integrated analytics system in your loan management system:
1. Know Your Portfolio
A strong analytical platform goes beyond tables and tables of data to easily define, build and configure self-service reports. This will enable you to make impactful decisions in the way you do business.
2. Better Understanding of Customer Equals Better Product Offerings
The vast amount of data generated from your loan management software can be put to good use to understand your customer behaviour. Whether you want to prioritise on customer acquisition or customer retention, analytics is an essential tool for segmenting your audience and client base. As a result, market yourselves in a better position to possibly open up opportunities to acquire new customers.
3. Extend your Abilities
Your data has a big story to tell, so let it! Leverage the benefits of analytics to lend a helping hand to your business and truly extend your capabilities to outperform against your competition. If not, you will be left behind in the race without knowing how to reboot and kickstart your campaign.
4. Analyse Lost Sales
Ask questions like why do some applications you approve end up with your competition? A detailed analysis is the only way of knowing how your deal structures are held up against the competition. It is important to identify your key differentiator and this is possible only through asking a lot of questions and get the right answers that can change your strategy and reposition yourself.
5. Drive your Business Strategy
At its essence, analytics make your data digestible and informative. Data is only valuable when it is converted to a tangible piece of information. Convert your data into valuable insights that convey a holistic picture to determine the overall business strategy of the organisation. The use of analytics and insights helps fintech companies to slice and dice data, thereby dictating the overall goals, objectives and targets.
6. Better Monitoring to Detect Business Loan Fraud
The world of business loans is also filled with scams and fraudulent activities that are often overlooked. The techniques used to determine fraud require recognising patterns of people, places, system and events. Implementing thoughtful technologies to automate these findings and record the instances will greatly increase the speed and effectiveness of monitoring fraud.
In addition, safeguarding customer information and protecting confidentiality is important at the same time. In the digital world, data security is vital as most of these frauds are low value and high volume. Analytics can help you identify data security breaches, patterns and recommended preventative action.
Finezza’s Configurable Reporting and Analytics Feature
Analytics is an essential tool that helps you derive greater benefits from an automated loan processing system. As automation improves your lending practice, analytics monitors your performance and helps you to enhance process efficiency continually. As a result, this will ensure that your lending business thrives and sustain profitability in the long run.
The following are the important aspects of Finezza’s configurable reporting facility that helps you accomplish operational efficiency:
1. Fully Configurable Dashboards
Your data can be modelled in a variety of ways to build the perspective that matters to you. Exercise the freedom to explore, design and create analytical models that are most valuable to your process and strategy. From pre-loaded reporting modules to fully-customised report feature, do it your way and your style. In the end, your data should convey a meaningful story that lets you come up with creative solutions.
2. Fully Integrated Analytics Platform
At Finezza, analytics is at the core of the overall Loan Lending Software Platform that runs in tandem with the individual processes of the overall lending lifecycle from start to finish and beyond. You can easily facilitate your staff to access the data and insights that they require to work smarter and up to speed.
3. User Relevance
You have the ultimate power to control data access for different staff. This will ensure that the relevant users are only able to view the data that is relevant to their role. You have the control to place applicable insights in front of the right people.
4. No Need to Build Reports from Scratch
Our closely tied analytics and reporting platform gives you the insight to closely monitor your business performance, identify trends and overcome any challenges that might come your way. There are several pre-configured dashboards and reports that make it easy to construct smart reports without breaking your head. From origination trends, operational efficiency to collateral valuation and credit approval metrics.
5. Configurable Dashboards for Unique Reporting Requirements
Apart from pre-configured reports, you also have the flexibility to think out of the box and construct data in the way you seek it. You can modify default reports to define more refined and new self-service reports. Point and select relevant data fields, group data or filters as per your preference to summarise activities.
All in all, Finezza’s strong analytical core runs parallel to your loan lending processes to create a perfect synergy of a well-rounded system. As a result, it provides you with a comprehensive package to drive your business towards excellence.
To know more about Finezza’s lending lifecycle management software, get in touch with us!