Bankers say that the three most important things in lending are costs, costs and costs.
But to their dismay, loan origination costs have been rising steadily year on year.
In 2017, lenders experienced the second highest loan production expenses in a decade.
What goes into making a loan?
The recipe for originating a loan include:
e. Corporate Allocations
Among these, commissions and compensation makes up the most of the share.
That’s because selling a loan takes considerable talent, energy that comes at a premium. Thus, there is stiff competition among lenders to retain valuable talents in the form of offering juicy commissions.
Fortunately, compensation is one component can be optimized. Typically, a loan file passes through multiple departments and people before being packaged and delivered to the customer. The problem of manual intervention has been exacerbated due to the lender behavior of hiring more people, rather than maintaining efficiency, defined performance targets and hiring only when inbound volume increases maximum capacity.
This problem can be solved by designing, creating, automating and deploying workflows through visual designers. This boosts operational responsiveness, reduce costs and balances effort compensation.
Automate to restrict rising costs
The runaway costs of loan origination can be controlled with the help of banking CRM, integrated with a robust LOS system. By using technology, training and well-defined workflows (with the help of visual designers), back office workforce can greatly increase the number of applications processed, reduce turnaround time from days to minutes, and more importantly, reduce errors.
Relationship Managers (RMs) can increase risk-reward gains by automating decisions
Financial institutions profit on taking the right risks. But finding one today involves a complicated journey of creating complex predictor and indicator models through multiple archaic and fragmented platforms in legacy systems.
Inaccessible and siloed data across spreadsheets delays risk reporting, updates to existing risk models and decreases operational efficiency. This makes it difficult to keep pace with dynamic models, regulatory changes and emerging best practices, ultimately becoming a contributing factor for increased lending costs.
Risk Assessment Platforms and CRM for banking provides tighter integration between model developers, model risk management and business teams. This greatly aids quicker decision making, decreasing turnaround time and greatly reducing costs and overheads.
Cut Time, Grow Margins
Show us a bank that cuts time through automation and we will show you an organization that grows profits and assets by over 25%.
Automation helps you to minimize tedious, time-consuming and low impact activities that revolve around repetitive activities.
For instance, collecting, collating and maintaining documents through smart document management systems. Acquiring real-time accurate credit intelligence through integration with rating agencies and other regulatory bodies. Enabling faster, actionable meetings through smart meetings that automates task reporting, assignment and follow-ups inside CRM in banking.
Automation will help your workforce shift focus from mere activities to more productive and profitable credit operations. These cost savings and benefits can then be passed on borrowers, eliminating upfront cost barriers for market growth.