A Digital Lending Platform streamlines the journey from application to close for any banking product, including mortgages, consumer loans, and deposit accounts. This enables banks to acquire more customers at a lower cost and create deeper customer relationships.
With a smart, automated digital lending platform in place, banks can stand to benefit from these 12 areas.
1. Optimize Loan Life Cycle
The biggest advantage of Digital Lending is speed.
The moment a customer submits loan applications online and uploads relevant documents kick starts the entire digital lending process in motion. After that, the Digital Lending platform can automatically evaluate applications within seconds. Meanwhile, background checks assess the creditworthiness of the borrower by integrating credit bureaus.
Based on the applicant’s data, the platform comes up with optimal loan terms. Credit history and past defaults provided by credit bureaus also help banks reduce risk.
So only within seconds after customers apply for loans with the digital lending platform, a contract is generated which can be signed electronically. Thus, the entire lending process is fast-tracked thanks to the seamless integration among components, which can result in cost and time savings.
2. Improve Business Efficiency
The traditional lending system was cumbersome for both the lender and the borrower. It depends on human intervention and interaction at practically all steps. Customers have to visit the bank multiple times, submit a variety of documents, and fill in all types of forms. The forms are then manually screened and verified by human officers before they approve the application and disburse the loan. This manual lending process can take up to several working days and is especially vulnerable to human errors.
On the other hand, a digital lending platform can automate the entire loan cycle from application to approval. It is also superior in terms of customer experience. In other words, a win-win solution for both the bank and its customers.
3. Easy capture of Applicant information
A Digital Lending platform eliminates the need for physical commuting. Now customers can apply for loans and get disbursed in real-time from any place they are.
After the user has filled in the necessary information, he can just upload his identification documents. Moreover, a Digital Lending platform can automatically fill in customers by leveraging OCR. Even ID cards or bank statements can be scanned for data instantly. These technologies are designed to reduce human errors, improve customer experience, and make sure that borrowers’ data are processed within seconds.
4. Perfect for first-time borrowers
First-time borrowers will find lending platforms familiar with other types of the platform they have been using, such as social or e-commerce. A fair share of today’s potential borrowers is Millennials. They can be separated from their smartphone and are comfortable with the automation that a digital lending platform provides.
A digital lending platform can automate the lending process while offering a user-friendly experience without requiring much manual input. Automated decision rules make sure that loan applications are processed without human errors and bias, which makes the lending experience enjoyable and faster.
5. Power of Analytics
Digital lending Platform’s built-in analytics helps banks track customer behavior and understand the user pattern that can be used to provide personalized communications across the digital lending process. Once enough data is collected, banks can even predict and allocate appropriate underwriting resources to suit various seasonal demands. Analytics also offers banks a deeper understanding of loan sources, demographics, credit tiers, and other inputs which can help define market strategy.
6. Provide an exceptional customer experience
With a digital lending platform, your customers can apply for loans and complete the follow-up tasks all on one device whether it’s a mobile phone or desktop. This includes connecting to their banking account, uploading documents, completing the eKYC process, sign e-signature. What’s more? Banks can configure these tasks to meet their unique requirements.
7. Close more loans in less time
Digital lending platforms provided through different channels let customers apply when and where it’s the most convenient for them, which can increase overall loan volume. Automation also frees employees of mundane, repetitive tasks and instead focuses on high-value one. This means bankers and loan officers have more time to consult and acquire customers.
8. Accelerate innovation
There are Digital Lending Platforms that are cloud-based and provide a modular architecture. This architecture allows banks to build and configure new loan products with fast time-to-market, all without writing a single line of code.
9. Increase submit rates and improve marketing ROI
Application forms on digital lending platforms are pre-populated with data users have shared. With this feature, customers know that you are trying to save their time, thus completing the application process faster. Moreover, banks can encourage customers to convert by allowing them to connect the digital platform directly to their financial accounts without the need to upload multiple documents.
10. Reduce lending costs
Digital Lending platform helps banks reduce substantially labor costs by automating repetitive manual processes. In addition, banks can eliminate the cost of mailing paper documents, linking account data, and e-signatures.
By shortening the loan cycle and using digital notes for the closing process, banks can save more costs for interest rate hedges and warehouse lines.
Over a period of time, digital lending platforms reduce overhead costs by 30-50%
11. Improve profitability
With a Digital Lending Platform, you can empower consumers to complete more of the origination process on their own by automating requests for additional information. You 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 you to handle greater fluctuations in volume without having to raise and lower your staffing levels.
Integrations with internal systems and third parties
Digital Lending Platforms create a bridge between internal and external systems, enabling loan transactions to proceed at the speed of machines and APIs, instead of at the slow pace of manual touches. Key integration points include CRM, LOS, core banking systems, pricing engines, fees, verification services, KYC providers, credit providers, document generation providers, e-signatures, and more.
12. Thrive in any rate environment
The COVID pandemic has resulted in lower interest rates, a boom in refinancing applications, a rise in forbearances, changes in government regulations, bank employees working from home, and a dramatic increase in digital channel use in place of bank branches. A Digital Lending Platform can help you address these challenges and increase your ability to respond quickly to new challenges as they emerge.
Digital Lending Platform has forever changed the way banks provide loan products and the way customers perceive loan procurement. Thanks to the digital lending platform, banks can fully automate the loan origination process with the latest technology such as eKYC, OCR, Machine Learning, Data Analytics, and more.