Increase Efficiency across Lending Operations with Cloud Software
The loan origination process is complex and highly fragmented. The manual process requires multiple touchpoints between different departments of the front office and back offices – which further involves multiple parties and activities that are prone to errors and delays. The traditional process is outdated and no longer adapts to the present times. In today’s competitive business environment, it is imperative to streamline operations, reduce costs, and accelerate the application process so that the organisation can maximize results by overcoming the challenges caused by the traditional loan origination process.
Key Challenges in Traditional Loan Origination Process
The traditional manual loan creation process, often done manually, is difficult for both borrowers and borrowers.
- Processing a large number of documents and paperwork is time consuming and susceptible to error.
- Different types of credit and loan products with different credit underwriting and workflow requirements can cause confusion and inefficiency.
- Verification and checking of customer information is a tedious task but a small error or mistake can cause serious issues.
- Data input from multiple parties throughout the whole process can cause data integrity problems
- If the correct document is not delivered to the correct part in time, the manual selection process will be delayed
- Transferring paperwork with sensitive financial information from one department to another can raise security issues and lead to compliance issues
- Lack of visibility into pipelines and workflows may affect management’s ability to optimize resources
- Lack of standardization leads to higher chances of human error and negligence.
From applying for a loan and submitting documents to loan fulfilment functions, the manual loan origination process can lead to delays, errors, and disappointments in customer experience. In today’s fast-changing digital world, such a tedious and lengthy process can no longer meet customer expectations. With Consumers demanding instant gratification or service – they expect fast and simplified resolution from any company with which they do business. Thus, Digitization and automation become the keys to improving the accuracy and efficiency of loan operations. With the right loan origination solution, organisations can serve customers irrespective of wherever they are, track all documents, protect sensitive information, automate workflows, and accelerate application processes.
The Benefits of Using a Cloud-Based Loan Origination Software
According to around 74% of Tech Chief Financial Officers say that Cloud computing accounted for the most measurable effect on their businesses and by 2020 around 83% of workload across the whole enterprise will be in the Cloud. Compared to on-premise solutions (such as purchasing software licenses or installing applications on personal hard drives), Cloud Platform enables businesses to better meet market demand, security compliance and customer focus meanwhile providing a cost-effective solution
Here are some key benefits of using a cloud-based solution to transform your lending operations.
Accessibility and Collaboration
Employees can access the cloud platform from anywhere through the Internet connection to enhance collaboration and ensure seamless communication irrespective of the physical location.
Real-time updates allow brokers/lenders to respond to potential customers in a quick manner. Cloud computing can also help organizations take leverage of the power of mobile workforce and reduce overhead and management costs.
Scalability and Capacity Planning
Cloud computing services allows organisations to implement features on demand based on business development. Institutions will have the capability to add users corresponding to the growth of the teams, thus saving them cost for the features that are not required.
Some Cloud based solutions include unlimited users or branches, so that the companies can focus on expanding geographically without having to worry about budget constraints.
Not only that makes staffing and capacity planning more agile, but also provide the ability to expand or add features to platform in a short period of time to meet loan volume needs without the requirement for additional IT resources or large investments.
Document Storage and Sharing
The large number of documents and paperwork involved in the loan issuance process is often the cause of errors and delays. If the document has been updated, different versions may cause more confusion. The cloud computing platform provides almost unlimited storage space for all the documents required during the loan application process. Since files are stored in a centralized location, everyone can access the latest version to avoid communication failures, unnecessary delays, and costly errors.
Role-Based Access and Features
The cloud-based platform enables you to get the right functions that match the role of each employee. Although the entire customer data is stored in a centralized location and is updated in real time, companies can implement role-based access to ensure that each employee can only view or edit the information they need to in order to complete their work thus reducing confusion and improve security.
Low Upfront Investment
Organisations tend to save an overall operational and administrative costs by 22% by implementing a Cloud based solution. In addition to the equipment that the employees need to connect to, companies do not need to purchase additional hardware or servers to start using the cloud computing platform. The time and cost required for initial setup are minimal thus removing the need of needing a large IT team to implement the solution.
Most cloud service providers charge monthly or annual subscription fees based on users, success, or usage that covers ongoing service and maintenance. This allows companies to better forecast the budget while reducing overhead and ongoing IT expenses.
With the implementation of a cloud-based loan origination system, businesses prepare themselves to be future-oriented as the SaaS subscription covers all the subsequent maintenance and software updates to ensure that the organisations use the latest technology. Businesses can ensure that they are always up-to-date without spending a lot of money on IT resources. By choosing a reputable provider that uses a first-class cloud hosting company (such as AWS Cloud), companies can be sure to get the most scalable and fastest-performing solution that will provide them a competitive advantage.
Cyber-security and Data Protection
As per the industry report, 66% of IT professionals said that security is their top concern, and it is increasingly becoming expensive for organizations to keep up with the latest cybersecurity protocols. The cost of data breaches is also climb sharply. This does not include factors such as the loss of repeat customers or future customers and reputation damage. Well known cloud service providers have a team of security specialists whose are experts in keeping the software up to date with the latest cyber security measures and data protection.
Moreover, most cloud platforms provide a variety of built-in security features, such as multi-factor authentication and IP lists, to ensure that only authorized users can view and edit or share sensitive data.
Backup and Recovery
As per the reports, IT downtime costs an average of $5,600 per minute, without taking into account other intangible costs due to downtime, interrupted customer experience and reputation damage.
Using cloud-based solutions can help you reduce the risk of downtime and benefit from built-in redundancy designed to maximize uptime.
Most cloud providers have also developed all-inclusive backup and recovery plans to ensure that the data can be backed up and secured even in unpredictable circumstances. For example, the use of distributed data centres can minimize the risk of interruption due to site-specific events (such as natural disasters).
Conclusion: Optimizing the Loan Origination and Management Process with a Cloud based Solution
Using cloud-based loan origination software (LOS) can help you increase profitability, optimize customer experience, reduce overhead, minimize errors, accelerate the application process, and improve security.
AutoCloud is end-to-end lending management platform that provides high-level configurable features to fit with your organization’s existing workflow and processes and meets your business goals. AutoCloud uses a trusted cloud hosting solution (Amazon's AWS) to ensure fast performance and optimal security. Contact Us to transform and scale your lending operations.