What is Automation?
Automation is a term used frequently in the technology industry. We all vaguely understand what automation means, but you may not know exactly how it works. When using automation, many have a fear that they are giving away control of their business. We will address what automation is, and how it can massively benefit lenders who utilize it.
According to the International Society of Automation, automation is the technique of making an apparatus, a process, or a system operate automatically.
In plain English, automation means using computers to replace manual processes typically done by humans.
How is Automation used in Lending?
Within the lending industry, an automation system is typically set up through a series of rules in a loan management software. An automated process then takes actions on behalf of your business based on the rules you set up.
When lenders use automation, they are delegating the most repetitive tasks of your business to a system that will always do exactly as you instruct. Computers simply follow a series of instructions perfectly every time. This frees lenders up to focus on the aspects of the business that need more attention, while also providing the fastest and best customer experience.
Meeting the needs of consumers has become increasingly difficult over the past few decades. As consumers demand more options from financial institutions, lenders must respond by providing more omnichannel lending options.
To effectively serve the average consumer today, you need to have an online presence. Customers can access anything they want online in every area of life. They expect to be able to complete a loan application online. If the customer isn’t able to complete a loan application online with you, they will go to a competitor.
When a customer enters your store there are processes and procedures in place that help you know your customers. First and foremost, you speak to your customers. You may get some information, bank statements, pay stubs, or other documents. All of this underwriting collateral is useful in understanding your customer’s needs and their ability to repay.
Lenders can’t interact with customers the same way online as you do in retail lending. This requires that you leverage other data sources to know your customer. With 3rd party data sources integrated with your lending solution, lenders can access information at a volume not possible in a face-to-face scenario. With all that data, you need a way to accurately process all of the information to effectively lend online.
What’s the solution?
As you may have guessed, the solution is automation. To provide the best customer experience, and go through the necessary steps of loan origination and loan servicing, lenders need automation.
Using automation, lenders can process that data at a speed not possible by human interaction. 3rd party data sources present that data in a way that is optimized for automated computer analysis. Omnichannel lending requires speed and efficiency in the underwriting process. Decisions once made in minutes need to be made in seconds.
Using next-generation decisioning provided by true omnichannel lending software solutions will maximize the opportunities provided by automation. Lending management solutions can pull data from multiple data sources, bank streams, employment data, and credit information to be analyzed. Based on a decision waterfall built and refined by you, a decision can automatically occur approving a potential customer. With the assistance of other lenders and service providers leveraging decades of experience, you can automate much of the lending process.
Whether you are a small business, mid-sized, or an enterprise, you need a loan origination and loan servicing software that accurately handles risk management.
That volume of data would take days to be analyzed and decisioned by a human. A computer can do it in milliseconds.
The opportunities provided by automation for financial services are endless throughout the loan life cycle. Automation can be leveraged to enhance the efficiency of your in-store lending team. You can enable automation to make more of your decisions more quickly. AI-powered automation can use credit scoring to decide, based on portfolio performance, when a loan is no longer collectible.
Best of all, your operational costs will decrease with easily repeatable tasks being delegated to your software. You free your employees to focus on the more sensitive matters of the business.
If you’re ready to start maximizing your business by leveraging automation, schedule a demo of Vergent LMS. Equip yourself with the technology driving the lending industry and start making any loan, any time, anywhere.