5 Steps to Fully Automate Your Digital Lending Operation 

digital lending through a phone

Many financial institutions believe a fully automated lending system is out of reach due to limited resources, but automated digital lending is more attainable than you may think. 

Banking customers’ preferences are evolving faster than ever before. In a world where almost anything can be done online in less than twenty minutes, why should they expect less from business lenders? Megabanks aren’t the only ones who can offer their customers and members an excellent digital loan experience. By working with the right partner to automate your digital lending operation, you can offer the same personalized experience.

Why Are Banks Adopting Digital Lending Platforms?

It’s no secret many consumers prefer to complete banking tasks from the comfort of their homes. Almost two-thirds of people who apply for consumer loans do so either partially or fully online. There’s no reason a business shouldn’t be offered the same convenient options. The COVID-19 pandemic also added fuel to the digital transformation fire. The impact of the virus and subsequent city lockdowns had on small businesses cannot be overstated, and many turned to loans for help. Paycheck Protection Program (PPP) loans, as well as lower interest rates helped generate more borrowing activity and sustain businesses hardest hit by the pandemic. As the economy recovers and consumers receive stimulus checks, many small businesses are now planning for growth in the year ahead and may seek additional funding to invest in their business. We have also seen a massive increase in digital banking adoption in general as people embrace convenience and avoid germs.

But there are benefits for lenders beyond just improved customer experience. Adopting a digital lending platform also enables better decisioning and cost savings. A report issued by Grand View Research, Inc. indicates that the global digital lending platform market size is destined to reach $15.3 billion by 2026, as financial institutions continue to seek the speed and efficiency of technology in lending.

5 Steps to Fully Automate Digital Lending Operations

So, how can financial institutions keep up with the changing times, especially with limited resources? When you work with a qualified provider like Accrue, all it takes is five simple steps.

1. Select Your Automated Lending Technology Solution

Lack of time or funding was previously a barrier to entry for many financial institutions pursuing digital transformation. Building a platform in-house can be expensive and time-consuming, and will likely require additional hires for implementation and ongoing maintenance. Working with an automated lending technology solution provider makes it easy.

When searching for an automated lending technology solution, top benefits to look for include…

  • Support throughout implementation
  • Ongoing maintenance
  • Banking and lending expertise
  • Rich data and analytics
  • Automated marketing features
  • Configurable decisioning and verification tools

It’s important to make sure you understand what kind of support the provider will give you throughout implementation and on an ongoing basis. A good provider will help you handle any difficulties that arise, not just leave you high and dry after they make the sale.

You should also consider the benefits of having everything, from lending to reporting and even marketing, all in one platform. Digital lending provides a lot of additional data you may not have had access to before. If you want to fully leverage it for marketing and reporting efforts, it’s helpful to have everything in one place.

2.Process Review

Next, you’ll need to evaluate your current processes and any new processes you’ll need to implement for digital loan origination. Think about your current pitfalls (customer experience, time it takes to complete a loan, etc.) and how a digital lending process might help. It’s equally important to consider where you are successful. How can you keep those positive elements while becoming more efficient?

You’ll also need to consult a compliance expert who is knowledgeable about local, state, and federal regulations. Automated lending technology improves compliance by making it easy to maintain documentation and improve loan decisioning processes. However, it’s still important to consult with an expert on the requirements for your specific needs.

Show us your manual processes, spreadsheets and checklists, and in 90 days we’ll clear a path to growth by simplifying your back office and delighting your customers with an efficient, affordable banking and lending lifecycle platform.

3. Implementation and Configuration

The automated lending platform implementation and configuration process is what truly sets decent platforms apart from excellent ones. An excellent provider makes it easy and handles the heavy lifting for you. Accrue provides a team of experts to help get you up and running quickly with minimal interruption to your business and customers.

4. Monitor and Adjust

Transitioning from a traditional loan processing strategy to a digitally automated platform can take some adjustment for employees. You may find that it works best to take small steps.

Similarly, some of your customers may not be ready to change, either. You may want to give them the option to fill out a paper form. Once they have provided their information, you can still enter it digitally and proceed to automated underwriting.

Many lenders begin with a “semi-automated” decisioning process, where they review declined applications to ensure there aren’t any mistakes until they become comfortable with the artificial intelligence (AI) technology. The benefit of AI is that you can apply multiple risk models with no additional cost and without human bias, making automated decisioning more efficient and fair. AI technology also gets “smarter” the longer it’s used, so it won’t be necessary to monitor it forever. The technology will become more reliable and employees will learn to trust it.

5. Reap the Benefits

After completing steps 1-4, you’re ready to enjoy the many benefits of a digital lending process!

Benefits of a digital lending platform include:

  • Improved customer experience
  • Faster approvals
  • Streamlined documentation
  • Reduced redundancy in tasks
  • Enhanced reporting
  • Greater consistency in lending decisions
  • Improved compliance
  • Continuous improvements in efficiency

One of the biggest benefits is the ability to track and analyze large amounts of data. This capability will improve marketing efforts, increase regulatory compliance, lower operational costs, uncover inefficiencies, and eliminate human error.

You’ll be able to process many more loans thanks to the efficiency of automation. Back and forth with customers will be significantly reduced once you offer them the ability to self-serve online. Borrowers can get faster approvals and skip the annoyance of paper documents while lenders enjoy the benefits of reduced redundancy, increased output, and a huge boost to ROI. Branch employees will have more time to serve those customers that do require face-to-face interaction, improving the overall experience across all channels.

Ready to start improving customer experience while increasing efficiency? Learn more about how Accrue can make your transition to automated digital lending simple & possible.