Gone are the days when a credit decision took weeks.
Today, customers demand eligibility decisions in minutes, else swarming to fintech disruptors who deliver faster credit decisions and transparent business processes.
The resulting churn is forcing banks to face the million dollar question of what quick actions to take for reducing decision time and increasing risk-reward gains.
The three quick actions for boosting lending profitability and performance:
1) Reimagine backend workflows
Using manual spreadsheets, standalone BRE tools and designers make origination time consuming, cumbersome and expensive. On top of that the sheer volume of production makes it daunting to analyze trends, thus missing the forest for the trees. Siloed data can make it difficult to find out and control deviations.
Having out of the box visual process designers, coupled with CRM for banking can lead to consistent and continuous process improvement, aided by powerful analytics. Creating models and editing them as per scenarios can strengthen your policy for pricing and decisions for non-performing assets. This will help save costs and give a breathing space to adjust strategies. Dedupe checks will eliminate duplicate data thus reducing data junk.
Lending is solely based on the principle of trust in the ability of the borrower to service the loan. However, there are rising instances of identity, income and collateral fraud. This directly increases the overall cost of surveillance, translating into an increased cost of borrowing. Additionally, unintentional data mistakes due to manual processes can lead to wrong and costly application decisions.
The answer lies in automating income verification and integrating with credit rating agencies to get up to date credit score and other parameters of the borrower. Traditionally, income verification was a manual process that required agents pouring into mountains of documents like pay slips and tax returns, leading to fatigue induced errors. Thanks to digital, lenders have, in many instances, direct access to a borrowers employment information and can fetch relevant data in minutes.
A robust, origination system, coupled with banking CRM, integrates and wires together with agencies and third party databases, saving time and overall information capture rate.
Your loan origination platform should be digital, highly convenient and efficient. No area of lending is hotter than automated decision making processes.
Every individual firm have their own rules and parameters to defining risks. Easy configuration and deployment of credit rules in loan origination platforms ensure that high quality applications are fast forwarded for processing.
Automated and workflow-driven origination processes confirm consistent policy compliance across departments and eliminate errors due to manual processes. Robust logging mechanism will also leave an audit trail for better accountability and compliance.
The perfect profitability and performance recipe
Siloed data structures enforce rigidity and provide very little legroom for adaptation. Integrating disparate systems and processes into a unified platform with data driven workflows and automation will empower the workforce to work on any application under any environment.
Repetitive tasks will be made redundant through automation, applications will be processed faster and workforce will be empowered to make customer relationships stronger, deeper and more importantly, profitable.