Consumer behaviour in the lending industry is evolving fast to match the paradigm shift in financial markets. Borrowers today expect instant loan approvals on the tap of the button, in a single click. Legacy loan origination systems and traditional processes that warrant manual intervention do not allow such levels of sophistication at the time of loan issuing. They feature elaborate workflow of sub-processes that are time-consuming, require human-resources and physical-space. Moreover, there is an additional cost associated with the legacy loan origination process that is incurred due to the need to maintain the workflow efficiently. Further, the involvement of a large workforce at various stages of the loan origination process opens it up to a widened scope of errors and frauds.
However, modern technology presents various creative solutions to eradicate any procedural errors or scope of potential frauds. Thanks to avant-garde tech solutions, lending companies can build a robust, error mitigating, and automated system that could process loans in a fraction of time at a substantially lower cost. Taking a broader perspective, it wouldn’t be entirely wrong to say that technology-backed lending organisations will thrive and dominate financial markets due to their low-cost-high-efficiency operations and brilliant customer service.
UI design and service delivery can be the distinguishing factors that make a particular loan origination system stand out, among others. After all, it is the lender’s choice of loan origination system and tools that differentiate them from the rest of the players in the financial market. Other factors that determine the choice of loan origination system include implementation time, degree of automation, integration scope concerning other technology solutions, and regulatory compliance it adheres to. In the modern competitive financial markets, lenders can only optimise their performance with a flexible, dynamic, and innovative loan origination system. Technological capabilities like artificial intelligence, digital APIs, machine learning algorithms, deep learning, advanced automation, and user-friendly point-of-sale functionality also affect the choice of lenders when buying a loan origination system. In the end, the right loan origination system is the one that adapts to the evolving requirements of growth-oriented lending operations.
How To Choose The Right Loan Origination System For Your Business?
A perfect loan origination software solution, or LOS, would optimise the stages of a borrower’s journey from origination to disbursal. Modern borrowers face a dilemma of choice when choosing lenders. They become biased towards lending companies that pose reasonable and promise prompt loan servicing.
Here is how to choose the right loan origination system for your business:
Easy Customer Onboarding
We are a mobile-first economy. Needless to say that the mobile phone penetration in India beats education accessibility. A desirable loan origination system would be the one that redesigns the customer journey and eliminates lethargic break-points for customers with simplified initiatives such as OTP based E-KYC, E-signature, E-mandates, E-stamping, etc. Such a system would enhance the overall customer experience for the lender and reduce the workload off the front end staff’s shoulders.
A loan origination system that boasts of automation capabilities can make the lending platform profitable. Automation functionalities help lenders manage processes quickly while effectively reducing the overall cost incurred per borrower. Systematic robotic process automation allows loan origination systems to execute several high-volume, repetitive tasks without any manual intervention at each step. Lending businesses can scale with enhanced ease with loan origination systems that come with seamless automation. They omit out the need to spend a lot of time handling routine paperwork, manual evaluation, and verification processes, thus leaving loan officers free to engage customers.
Adherence to Compliance
Indian lending environment comes highly regulated, necessitating the need for a quality check during the lending process. Only a loan origination system that runs loan applications through the quality control queue for auditing purposes and ensures compliance with guidelines issued by the RBI provides a beneficial solution. Thus lending businesses must choose a loan origination system that offers strong support for regulatory compliance. It is because loan-level compliance testing is of prime importance to the lending process. An easily configurable Loan Origination System that can be efficiently embedded into the lender’s workflow.
State of the art loan origination system is the one that supports all of the critical steps in the loan origination process. An ideal platform would cover all phases of loan origination right from the point of sale, including post-closing to ease the burden off a lending officer’s shoulders. A loan origination platform can also make the process error-free.
Any lending business that places customer convenience above all things else; is swift to embrace technological upgrades like loan origination software. They ease the process of lending, but they also make the process of applying a tad bit more comfortable. The choice of a Loan Origination System is a long term investment for lending businesses. Lending officers can breathe a sigh of relief thanks to loan origination systems that integrate easily with existing lending frameworks and ensure that all the needed documents are put in place before the process of credit assessment begins. Modern lenders look out for capabilities like streamlined workflow, fast processing, and regulatory compliance when they lookout for a loan origination system. A loan origination system assists a lending business in intelligent and highly customised decision making. New-age Loan Origination Management solutions allow the inflow of loan applications through multiple channels resulting in high volumes. High volumes of loan applications necessitate the use of data analysis in a loan origination system for the strategic decision on loan applications. All in all, only lending businesses that leverage loan origination solutions to create value earn loyal customers through a focus on customer service.
Finezza is an accessible loan origination and lending lifecycle management software that facilitates well-aligned loan disbursal for lenders and excellent customer experience for the borrower. The framework comes equipped with unique capabilities that streamline lending workflows, making it more transparent for the borrowers. It leverages data to produce strategic insights for lending companies.
The framework aids lending stages like pre-qualification, application processing, underwriting, credit decisions, and quality checks with great ease.