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We are living in an era where consumers are no longer limited to relying on their local bank or Credit Union to get a loan. The Fintech lending market is offering loans in a quick and seamless manner-meeting their customers in a matter of minutes. This means financial institutions who continue to hold on to their traditional and inconvenient loan processes will get left behind. In order to attract and retain customers banks and credit unions will need to improve their loan origination process to keep up with the competition.
There are 8 keys tools that should be leveraged to enhance your lending process.
Document Management
To accelerate the loan application and decisioning process it’s essential that you have all your borrowers’ documents at your fingertips. You’d be surprised how much time your lending team spends searching through paperwork folders and internal drives to find the information they need. With document management tools, you can improve productivity by providing new ways to organize and manage applicant information.
Electronic Signatures
These tools allow applicants to safely sign documents online and remove the need for customers to come into the branch to sign or drop off paperwork. It also enables applicants to sign anywhere at any time, reducing the chances of application abandonment. By digitizing this step FIs can create a better experience for both borrowers and lenders and speed up the application process.
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Verification and Fraud Protection
Identity verification is essential to minimizing risk to loan fraud and theft, however traditional verification methods can easily cause friction in the loan application process. If employees have to manually check IDs against databases and pause the process to do so, customers will likely search for quicker alternatives. Digital KYC tools will allow applicants to capture and confirm data directly from their driver’s license or other personal identification.
Data Extracts
With so much data to collect, organize, and review data extraction can be a struggle. Integrating with data extraction tools will enable indirect sources to transmit and receive loan application data with financial institutions. Having this data will also be valuable in cross-selling personalized offers.
Auto Decisioning
In the lending space it is critical that you can evaluate and make decisions as quickly as possible. Each minute that passes is an opportunity for your competitors to steal your applicant as they shop for a loan elsewhere. It is essential that your lending process includes holistic, auto decisioning that can deliver decisions immediately. With the right tools, you can set your own rules and guidelines when deciding who will get approval that looks beyond just a credit score.
Payment Processing
Gone are the days when consumers take out a checkbook to pay their bills or willingly choose to fill out a form with their credit card information that they must mail back. Loan servicing companies must be able to provide dependable loan payment processing that can service a variety of loan types and terms. The ability to make payments online safely with their debit or credit card is a consumer expectation that they will not compromise on.
Indirect Lending
A key component to an effective loan origination system is the indirect lending solutions. These tools help differentiate financial institutions from the competition by meeting your customers where they are and delivering fast and accurate decisions.
Marketing Automation
Once an applicant starts an application the financial institution has valuable data, they can use to offer tailored services and products. With the right marketing automation solutions based on the data you’ve collected from their applications, credit reports, and other sources you can increase customer acquisitions and retention by promoting personalized offers throughout the customer journey. Common uses for these tools include email and social media campaigns, which can be very tedious and time consuming when done manually.
A seamless, personal, and digital experience is no longer an option, but a necessity to compete in the fast-moving lending industry. By integrating the above-mentioned tools, you can enhance your loan origination system and become a market leader.
How Temenos Can Help
Temenos next-generation loan origination system is an innovative application for both direct and indirect lending that has raised the bar in automated solutions. With its powerful decisioning, highly configurable applications, and extensive third-party integrations, Temenos Infinity Loan Origination will truly take lending to the next level.
By: Dallan McManus – Executive Vice President CMB – Product Management
Originally published at: Temenos
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