In loan servicing and commercial lending, it is essential to efficiently manage paperwork, cash flow analysis, and other time-consuming tasks. Since loan administration requires excellent precision, timeliness and accuracy are essential.
Typically, manual and ineffective management is observed, particularly in companies whose primary business isn’t corporate lending, like intent company loans and ancillary financing. Corporate lending software has come into existence to improve many business conditions and aid in eliminating manual operations.
In this blog post, let’s examine how lending software saves money, time, and human error while increasing profitability.
Challenges for Corporate Lending Software
Amidst the heightened competition in the lending industry and the elevated cost of borrowing, all company stakeholders must adopt as many agile practices as feasible.
Nevertheless, the corporate lending domain faces a few challenges.
1. Inefficient Document Collection Processes
During the document collection stage of loan applications, most commercial lenders still rely on hard copies of paper documents and email attachments. Only one-third of lenders allow customers to submit paperwork electronically.
A client may be required to submit several dozen documents, including bank statements, notarisations, and profit and loss statements. When companies have to plan time for hard copy distribution or wait for loan officers to find and respond to emails, their downtime accumulates quickly.
When things are done this way, the paperwork wait time can make up as much as 40% of the commercial loan sales cycle.
As a remedy, banks can implement digital solutions to collect documents effectively for loan officers and clients, paving the way for a more efficient and satisfying lending process.
2. Redundant Manual Data Entering and Collection
The commercial lending sector is still mired in inefficient manual data-entering procedures. Loan officers are forced to manually enter the same information into various systems up to five times, and they spend between 30 and 40 percent of their working hours on automatable duplicate data entry jobs. This inefficiency is a clear call for the adoption of digital solutions.
Eliminating redundant data entering calls for a dual strategy. To develop common visibility for client information, firms must first invest in software systems and service integration.
To further reduce time lost to manual inefficiencies, they must secondly identify phases in their processes that can be automated.
3. Evolving Client Service Requirements
Customers today prefer digital interaction and multichannel communication over traditional face-to-face meetings in almost every business.
According to a McKinsey report, businesses that expand their digital communications and self-service decisions in response to client preferences report an average 15-20% improvement in customer satisfaction, a 20–40% decrease in operating expenses, and a demonstrable rise in the likelihood that customers will promote their services to others.
Sustaining high customer satisfaction standards in the future will necessitate honing those same abilities in other communication channels. This can be facilitated by gathering current client information and making it available to loan personnel so they can offer tailored client experiences.
Emergence of Corporate Lending Software
The corporate lending software has been a game-changer for the lending industry.
Lending software automates and streamlines the whole loan lifecycle, from application through approval and everything thereafter, by leveraging technologies like artificial intelligence (AI), machine learning, and big data analytics.
Benefits of Corporate Lending Software
The following are some of the benefits of corporate lending software
1. Speedier and Precise Decision Making
Automation facilitates the process of evaluating customers. Lending software eliminates the need for tedious manual decision-making processes. Even though every step can be carried out automatically, human intervention is still possible. When necessary, managers and sales representatives might step in.
It saves lenders time to approve or reject applications since they can create their own decision rules. Representatives can use third-party data services to confirm the applicants’ credit information. By utilising a combination of pre-established criteria and comprehensive data availability, lenders can make more informed decisions more quickly.
Moreover, instantaneous document verification occurs. Not a single document is lost, making decision-making a predictable process.
2. Use of Analytics
One of the clear advantages of corporate lending software is analytics. The software provides an overview of how lending practices are affecting the business. Lenders can also benefit from analysing the weaker areas in depth.
Lenders can choose and finalise borrowers more quickly. The lender may also use the data to promote loans to particular demographics.
Data analytics can enable organisations to lower the risks related to bad loans. Analytics can also aid in shortening the tedious loan life cycle procedures. It is a crucial resource for learning how to better use the lending platform as a lender.
3. Enhanced Customer Experience
Corporate lending software is much more friendly to users and customers. The customer typically uses a different web-based interface provided by the lending platform.
Consumers have the option to browse merchandise, submit loan applications, or communicate with the lender. The client can do this from any location with internet access. Additionally, the consumer is more likely to apply for a loan if it is easy to obtain.
As applicants fill out the form, they can also verify their eligibility. Guided and interactive forms assist applicants in entering accurate data. Most of the origination process can be automated, freeing humans up for more complex jobs.
The software can also verify whether the applicant submitted accurate information.
4. Mobile CRM Features
Corporate lending software also supports mobile CRM features, which allow mobile devices to handle the full loan processing process. Agents in charge of field sales and collections will particularly benefit from this.
Mobile features can include app support, SMS gateway support, and support via phone calls. The app allows your field agents to access tasks allocated to them, take notes during meetings, and much more.
With daily objectives and route direction, it can also assist in organising your agent’s schedule. Conversation tracking tools and geofencing check-ins allow you to monitor your agent’s activity. The app is also available to lenders for analytics and reporting needs.
Additionally, you can utilise the app for KYC verification and e-signing loan paperwork. E-signing makes both signings and requesting a signature. It also speeds up the application process.
Key Takeaways
Despite these challenges, the corporate lending software revolution shows no signs of slowing down. As technology continues to evolve and regulatory frameworks adapt to the digital age, we can expect to see even greater innovation in the years to come.
By embracing these advancements, financial institutions can stay ahead of the curve and unlock new opportunities for growth and prosperity.
A pioneer in lending software, Finezza is a state-of-the-art fintech platform with an improved Loan Management System that increases productivity and encourages responsible lending. It is ideal for lending institutions looking for a complete solution because of its capabilities, which immediately streamline debt collection, and its advanced features, which elevate lending processes through AI-powered integrations with important financial partners and automated bank statement analysis.
Book a demo to learn more!