Five Benefits of Automation in Lending: Make it Right, Right Now


Technology is putting everything on autopilot these days – even our cars are beginning to drive themselves. From manufacturing to marketing, automation and cloud-based computing are changing the way we work, and driving better outcomes for businesses and consumers. The revolution in automation is also driving changes in loan origination, helping financial institutions like yours improve loan quality and decision- making, reduce costs and fight fraud.

Borrowers want speed and ease, which requires moving from paper-based processes to digital origination and servicing capabilities. Balancing borrower expectations against the requirements of compliance and risk management can be challenging, but there are several upsides.

Here are five benefits of automation in lending:

1. Higher Quality

During origination, loan officers intake hundreds of documents a number of ways, including face-to-face interactions, email, fax, text, or documents uploaded through a site. Each document needs to be collected, carefully tracked and thoroughly reviewed against information provided on the loan application and from third-party sources. Unlike manual efforts, technology can identically process every document, resulting in more reliable results and higher quality.

2. Comprehensive View

In a click, automated software programs can prepare a comprehensive view of documents that have been received, verified or flagged for follow-up. In contrast, documents collected and tracked through manual efforts may not be available on various systems, paper-based checklists or a loan officer's email account.

3. Speed

Using intelligent content recognition, a lender's document review and verification can occur 24/7, which speeds up processing and shortens origination time frames. Reducing the hands-on time also reduces the overall cost per loan.

4. Scalability

Automation greatly reduces training demands and risk, helping lenders quickly and more affordably scale to meet peak seasons. That translates to lower risk of quality degradation and lenders can save on overhead costs associated with ongoing training.

5. Fraud Detection

Computer-assisted document review can also help expose fraud. Software programs are better than humans at finding irregularities that might point to an issue, like addresses, names or Social Security numbers that don't match perfectly across dozens of documents.

Borrowers want speed and ease, which requires moving from paper-based processes to digital origination and servicing capabilities.

As a general rule, slow, labor-intensive tasks are the best candidates for automation. Processes that can be standardized or require rigid consistency also rank high on the list. Using technology to complete those types of tasks speeds up processes while simultaneously reducing staff time and related costs.

The goal of automation is not to replace your existing loan origination system or related quality systems. The best tools work with existing technology to improve the quality and speed of the information that is entered.

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