Technological advancements have changed lending significantly – banks are integrating fintech and modern loan origination software in their legacy systems. And automation has enabled small players to compete with banks by offering loans at competitive rates. However, since technology keeps changing, you’ll need to update your working capital lending operation to stay relevant.
While automation has helped lenders improve productivity, efficiency, and speed of making decisions, it also requires you to stay aware of changes in technology and customer behaviour.
Let’s further understand why your working capital operation needs to be updated regularly.
7 Signs Your Working Capital Lending Operations Need To Be Updated
The lending market has become competitive; hence your lending operations need to be updated to meet consumer demands and achieve business goals. Keep reading to find out if your lending operations need to be updated or not.
1. Not able to achieve business goals
Are you unable to convert loan applications while your competitors are moving ahead? If yes, your marketing software may not correctly integrate with your loan origination software. To run your working capital lending operations smoothly, your loan software should allow seamless third-party integrations.
Finezza’s loan origination software easily integrates with different APIs for a faster exchange of information and provides an end-to-end solution to achieve your business goals.
2. Lack of credit assessment tools
Credit assessment is an essential process for successful lending. However, usually, lenders manually collect and analyse borrowers’ information to assign a credit score. This process is prone to errors and time-consuming as it can take days or weeks.
With the right automation tool, you can scale the loan processing while ensuring that the decision is accurate. Finezza’s loan origination system uses credit assessment tools to analyse Bank Statement Analysis and Financial Statement Analysis. It also uses a unique scoring model to predict how successfully the applicant will repay the loan.
3. Frequent data security breaches or hacks
With rising cybersecurity threats, breaches, and hacks, data security has become essential. If your lending software is outdated, it will not be able to detect threats, which will lead to frequent breaches.
Since, as a lender, you have a large amount of confidential data, such breaches can affect your business operations and tarnish your reputation. Hence, you need to upgrade to software that complies with all data security regulations and has several checks in place.
Finezza’s uses in-built threat detection features to identify and classify different transactions.
4. Lack of good customer support channels
With the emergence of chatbots and customer support tickets, customers expect quick resolution of their problems. Hence, a contact us page or phone number will not do the job. Customers might get annoyed if they don’t have access to a proper communication medium.
If your customers are annoyed as their issues are not being addressed on time, you need to upgrade to a lending software, which makes it easy for them to communicate with you. Plus, customers should be able to contact you regardless of the medium they use – phone, email, messenger, etc.
5. Lack of end-to-end solutions
Your working capital operations can be affected if your software provides partial solutions. In this case, you’ll have to use several different tools to manage other processes, which can lead to miscommunication.
Hence, opt for lending software that provides end-to-end solutions, such as underwriting, origination, reporting, etc. In addition, it will help you integrate various processes so that your working capital lending operations are automated while requiring minimum input.
6. Your lending software is not user-friendly
There is cutthroat competition with small players competing with banks to offer loans. In this market, the lending software you use for your working capital lending operations needs to be user-friendly.
The borrower will likely leave if the website or app is not easy-to-navigate. The software you use for your lending operations should be easy-to-use, and the features should be easy to understand. Opt for a software that has a simple and intuitive UI and UX, and the user should be able to learn about the features in less time.
7. Not using alternate credit scoring
Alternate credit scoring is used to provide a credit score to first-time borrowers to bring these sections of society within the lending fold. However, since first-time borrowers don’t have previous borrowing history, traditional banks consider their application risky.
On the other hand, modern lenders use alternate scoring techniques to underwrite loan applications of first-time borrowers. Alternative credit scoring tools use machine learning and deep neural networks to analyse the purchase habits of such applicants to identify their creditworthiness.
If you are not already using alternate credit scoring tools, you need to upgrade to identify applicants who seem risky to traditional banks.
Wrapping Up
Lenders with time-consuming, manual, and lengthy working capital lending operations are likely to churn out loans slowly and provide a bad customer experience. Hence, you should regularly update your processes to ensure they are optimised and timely.
Suppose you are not able to achieve your business goals. If you experience frequent security threats and manual processes are slowing down your business, you should invest in a good loan origination system.
Finezza offers robust end-to-end loan origination software, which will cater to your needs and provide your customers with a great experience. Some of the key features of the LOS are automatic document identification, easy integration with APIs, loan eligibility estimator, bank statement analytics, credit assessment tools, 360-degree customer profile assessment, and threat detection checks. Get in touch with us today to learn about our loan origination software.