New changes in rates, regulations, competitions, and new technologies all the more increase this pressure of digital lending. Banks need a new lending technology to rapidly adapt to market shifts and stay ahead of competitors.
Fortunately, a Digital Lending Platform can help banks address all those challenges.
What is Digital Lending Platform
A Digital Lending Platform automates the journey from application to disbursement for any lending product—be it mortgages, consumer loans, or deposit accounts.
With Digital Lending Platforms, banks can acquire and assess customers faster while enhancing back-office processes and reducing costs. It helps banks solve these challenges by delivering an all-in-one place to manage individual customers’ lending journey—from application, underwriting, to disbursement and collection.
In today’s everything-digital world, customers are so used to the seamless and intuitive shopping experience from Momo, Shopee, and Grab. They expect the same thing from lending. Customers demand the ability to apply for loans and are disbursed online via digital platforms, without having to visit the physical branch.
Below are some of the capabilities of a Digital Lending Platform:
Seamless customer experiences from application to collection
With the Digital Lending Platform, your potential lenders can use any device—be it the mobile phone, tablet, or desktop—to apply for loans and complete the follow-up tasks to receive the disbursement. The platform supports everything involved in the lending workflow, which involves connecting to their bank account, uploading documents, completing the eKYC process, providing e-signature, … All that is customizable to meet banks’ unique requirements.
Role-based tools for loan officers
A Digital Lending Platform provides each officer with a digital workspace to support lenders. The workspace typically includes interfaces for managing applications, communicating with customers online to complete follow-ups, providing settlement and closing services, and engaging with referral partners.
Automated verification and accuracy checks
By directly connecting to financial data sources, the digital lending platform helps banks eliminate the use of paper. It makes approvals faster and reduces fraud risk by integrating a wide range of eKYC solutions to verify customers’ identity, assets, employment, and income.
Data-driven workflows and automated decisioning
The Digital Lending Platform applies workflows that loan officers can customize themselves without having to write codes. The result is that manual, paper-based processes are reduced significantly. Also, it can automate requests for information, which provides underwriters with accurate and up-to-date loan files to finalize credit decisioning. In addition, the platform can automatically apply bank’s credit policies to unlock more efficiency gains.
Automated pre-approvals and in-context offers
After consumers finish applying for a given loan product, a Digital Lending Platform can cross-sell them with relevant offers directly within the loan workflow. For example, as a customer applies for a mortgage, the Digital Lending Platform can automatically reward them with lower interest rates if they open a deposit account.
Moreover, Digital Lending Platforms can use data provided by the borrower in one loan product to generate pre-approved offers for other products.
Integrations with internal systems and third parties
Digital Lending Platforms allow for seamless integration between internal and external systems. Key integration points include CRM, LOS, core banking systems, pricing engines, eKYC solutions, KYC providers, credit providers, document generation providers, e-signatures, and more.
How can a Digital Lending Platform power better banking?
A digital lending platform is not just about providing a better lending experience for customers. It’s also about enhancing the efficiency of banks’ internal loan processing thanks to greater interactions between employees, third-party partners, and a wide range of IT systems. Some of the key benefits of a Digital Lending Platform are:
Close more loans in less time
A digital lending platform can be implemented on a wide range of digital channels. It allows customers to apply when and where it’s most convenient for them. Ultimately this can translate to increased loan volume.
Moreover, automation also frees employees from manual tasks and redirects their efforts to high-value work such as acquiring customers and generating inbound referrals.
Deliver exceptional customer experiences
Moden consumers demand their bank be in service wherever they are. By providing one seamless digital lending experience across every device, customers can start applications in one channel and finish in another.
Accelerate innovation within low-code approach
Top Digital Lending Platforms are cloud-based. They come with a modular architecture that allows banks to build new digital loan products and rapidly release them, all without writing a single line of code.
Deepen customer relationships
Using a single platform across loan products allows banks to integrate cross-selling opportunities for multiple other products into a single workflow. It also makes it far simpler to use the data collected from one loan application to generate pre-approvals and marketing offers for other products. Lastly, automating low-value tasks frees up more time for loan officers to cultivate more personal relationships with customers.
Reduce lending costs
Not only can Digital Lending Platforms reduce your labor costs by automating manual processes, but they also can replace costs for mailing paper documents, linking account data, and e-signatures. By shortening the loan cycles, banks can achieve additional cost savings for interest rate hedges and warehouse lines.
With a Digital Lending Platform, banks can empower customers to complete more of the origination process on their own by automating requests for additional information. Banks can also automate key tasks like preapprovals, adverse action notices, letters of explanation, verification checks, data extraction from documents, and more. Together, these capabilities allow banks to handle greater fluctuations in volume without having to raise and lower their staffing levels.
Integrating with other systems
Digital Lending Platforms orchestrates complex lending ecosystems, which includes back-office systems, consumer financial data sources, technology component suppliers, third party service providers, and secondary market investors. The role of the Digital Lending Platform is to connect the various systems needed to close a loan or open an account, ensuring they communicate in ways that deliver a quick and efficient lending process. This typically occurs through a combination of pre-built integrations and APIs that allow customized data flows.
Here is a brief overview of how Digital Lending Platforms work with the most common elements of a bank’s technology stack:
Digital Lending Platform
- Delivers a consistent customer experience for any banking product from application to close
- Provides role-based workspaces for loan teams, realtors, and settlement agents
- Streamlines workflows for acquiring new customers and deepening customer relationships
- Provides a configurable platform that shortens time to market for new product offerings
The Digital Lending Platform enables the consumer to interact seamlessly with every person and system that needs to work together to process their application for a loan or a new deposit account.
Loan Origination System (LOS) and Digital Lending Platform
- Acts as the system of record for a loan
- Provides a workspace for underwriters
- Packages closed loans for investors
The Digital Lending Platform keeps information flowing to and from your LOS so you can ensure loans meet all regulatory and investor requirements.
Core Banking System and Digital Lending Platform
- Acts as the system of record for a bank account
The DLP connects with your core banking system to provision and fund new deposit accounts.
CRM system and Digital Lending Platform
- Acts as the system of record for a customer
- Manages marketing campaigns that drive loan applications
- Enables application pre-fill
- Automates outreach to consumers who abandon applications
The Digital Lending Platform connects to your existing CRM to provide the best possible experience for your customer. Through this connection, customers can minimize repeating information they have previously provided, and you can use automated triggers to reach out to applicants who abandon applications partway through.
Consumer financial data sources and Digital Lending Platform
- Provides consumer data related to assets, income, and taxes
The Digital Lending Platform allows applicants to connect to their financial institutions and provide permission for data to be used for loan and deposit account applications. This facilitates increased accuracy of financial data and minimizes the need for labor-intensive tasks typically required to build a complete financial profile.
Verification providers and Digital Lending Platform
- Verifies identity, income, assets, and employment
The Digital Lending Platform integrates with established verification providers to validate that the data contained in an application is accurate.
Third-party services and Digital Lending Platform
- Fulfills credit checks, appraisals, insurance, title, and notary services
The Digital Lending Platform uses APIs to connect with a wide variety of third-party service providers necessary to close a loan or open a deposit account.
Checklist for evaluating Digital Lending Platforms
The right Digital Lending Platform provider can have a significant impact on the future success of your bank. Here is a short summary of some key capabilities to look for, which are divided into two categories: Core Platform capabilities and Product-Specific Capabilities
Core platform capabilities
- White-labeled consumer experiences
- Mobile-first experience for applications and follow-ups with real-time co-pilot option
- Omnichannel consumer experience (i.e applications can be started and completed in any channel)
- Automated follow-up requests
- Document portal
- Personalized customer experience with easy single sign-on (SSO) authentication and applications pre-filled with existing banking information on any digital device.
- Seamless data connectivity for pulling in financial data from asset accounts, payroll systems, and tax providers
- Role-based workspaces for loan teams
- OCR for document recognition and data extraction
- Universal customer profile
- Automated data verification checks for identity, assets, income, and employment.
- Support for soft and hard credit pulls
- >Flexible configuration options
- Support for e-consent and disclosures
- Automated and configurable workflows
- Pre-built and customizable integrations with CRM, LOS, pricing engines, credit providers, core banking systems, etc.
- Extensive API and developer portal
- Reporting tools to view key metrics about application activity
- Mobile apps for loan teams and real estate agents
- Support for both self-service and LO-driven pre-approvals
- Supports lender in configuring for ADA, ECOA, and TRID requirements
- Integrated eClosing solution that supports traditional wet-sign, hybrid, and RON
- Marketplaces to provide consumers access to realty, home insurance, and title services
- Support for Auto Loans, Specialty Vehicle Loans, Personal Loans, Credit Cards, and Home Equity Unique integrations and workflows for different loan products
- Automated stipulation requests and task workflows
- Support for a fully digital process with online closing Supports lender in configuring for KYC, AML, and ADA requirements
- Ability to configure application workflows or create new workflows without writing code
- Ability to provide instant pre-approvals for multiple products based on the lender’s decisioning criteria
- Deposit account opening Support for opening checking, savings, CDs, and other depository accounts
- Support for instant approvals
- Supports bank in configuring for KYC, AML, and ADA requirements Multiple account funding options
At MOBA, we provide next-gen low-code Digital Lending Platform that empowers banks to deliver seamless lending experience across channels, while accelerating new loan products’ time-to-market and enhancing operational efficiency. Learn more about our platform here