Are you, like many lenders across the country, also facing a recurring challenge: a high attrition rate amongst loan officers?
According to research, approximately 35-40% of new loan officers leave within the first 60 days of joining, due to a combination of factors. Each replacement costs lenders ₹2.5-4 lakh when accounting for recruitment, training, and productivity losses. Disillusionment with complex, manual workflows, intensive fieldwork pressure, and inadequate support are the top reasons for this.
So what can you do? Accept it as part of the industry norm and an inevitability, or try to address the factors driving the attrition rate? What if there was another option? Artificial Intelligence (AI) offers a solution that addresses these pain points by streamlining operations and providing better support.
The Finezza Co-Pilot is an AI assistant that can be integrated directly within your Loan Management System and helps reduce the gap between job expectations and the reality of daily tasks, leading to burnout and dissatisfaction.
Why New Loan Officers Leave Within 60 Days
RBI Deputy Governor Swaminathan J. noted that attrition rates reflect deeper challenges in employee engagement and retention strategies. This challenge has intensified in 2024 as digital lending adoption increases application volumes without corresponding improvements in operational support systems.
Four operational challenges drive this pattern:
Challenges in Client Servicing
New loan officers find it challenging to navigate multiple, disconnected systems, even for answering simple borrower queries. If a query like “Can the client prepay their loan and what are the charges?” takes hours and multiple systems to sift through, it could be frustrating and inefficient for them.
Manual and Repetitive Work
Loan officers spend 3-4 hours daily (and sometimes more) on manual data entry, document verification, and cross-checking across various platforms, which are time-consuming and prone to errors. This manual work leaves them little time to service clients or onboard new ones, making it difficult for them to meet their targets.This workload imbalance is why loan officer retention remains a critical challenge for NBFCs and lending institutions.
Inadequate Onboarding and Training
Fresh recruits often enter their jobs without receiving sufficient training, or the programs may be ineffective and fail to prepare them for real-world scenarios. A lack of mentorship and required support, especially crucial in the early days, contributes to disillusionment among loan officers and prompts them to leave.
Low Salaries
Field staff are often recruited at low salaries, and after a few days or weeks, they may realise that the remuneration is not commensurate with the time and effort they need to put in. A lack of clarity regarding their roles and promotion paths adds to their intent to quit.
How Finezza’s AI-Powered Co-Pilot Supports Loan Officers
Beyond recruitment costs, this attrition pattern disrupts customer relationships and institutional knowledge. When loan officers leave within 60 days, borrowers interact with multiple representatives for a single application, reducing trust and satisfaction. AI-powered assistance addresses the operational bottlenecks that drive this early attrition.
AI tools help loan officers manage their multiple daily tasks with greater efficiency, especially for those new to the system who may find even small tasks challenging.
Finezza Co-Pilot addresses these challenges through three core capabilities:
Aids Information Retrieval
One of the challenges loan officers face is navigating multiple screens and systems to answer each query they or their clients may have. Finding out about the foreclosure details or the repayment schedule could take time and energy if done the traditional way.
Co-Pilot eliminates this workflow bottleneck by fetching information instantly.
A loan officer can ask a question: “What would the repayment charges for loan number 123456 be? “
Rather than going through different schedules, systems, and struggling with questions, the officer can expect a comprehensive answer instantly, reducing query resolution time from 15 minutes to under 30 seconds and ensuring prompt customer responses.
Automates Routine Tasks
With AI handling repetitive, time-consuming tasks that do not add value, loan officers can focus more on servicing clients or onboarding new ones. Generating repayment schedules, creating payment links, and accessing formatted files with instalments, due dates, and amounts is easy with Co-pilot.
A loan officer just needs to specify the loan ID and document type, and the system handles everything from data extraction to formatting, ready for download or sharing with the borrower.
Empowers Loan Officers
Co-Pilot empowers loan officers by minimising their reliance on extensive system knowledge, complex processes, or frequent support from senior colleagues. This independence helps officers become more confident and productive in their roles.
Even though recruits are provided with training and orientation sessions, it may not be sufficient. The new team member may find it difficult to absorb, retain, and retrieve all the information. Finezza Co-pilot removes this bottleneck, acting as a constant training module or mentor for loan officers. They can ask any question, regardless of how intricate it is, and expect a comprehensive and accurate response.
To Sum It Up
The high attrition rate among new loan officers highlights a pressing challenge for lenders. Traditional barriers, such as manual workloads, inadequate training, and a lack of support, can erode motivation, reduce productivity, and increase stress among employees.
Retaining employees helps lenders improve their productivity and customer loyalty. Integrating AI-driven solutions such as Finezza’s Co-Pilot helps lenders tackle the attrition challenge through continuous on-the-job support and access to reliable, quick information. The Co-pilot is available for immediate use for Loan Management System users without the need to create a separate login or provide any training. The tool makes resolving queries effortless, as it has a contextual conversation memory and includes direct links to relevant loan pages in response to a question.
Co-Pilot operates within Finezza’s comprehensive LMS ecosystem, which includes multi-loan type support, flexible payment modules, and seamless integration with credit bureaus and payment gateways.
Reduce loan officer attrition and improve operational efficiency with Finezza Co-Pilot. Contact us now to know how conversational AI integrates with your existing LMS infrastructure.
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