Loan Management System Workflow Automation

Larissa Lewis February 10, 2022

loan-management-workflow-automation

Microsoft Excel is nearing its fortieth year. Spreadsheets, known for their 90% error rate and errant keystrokes that ring up billions of dollars in uh-oh moments, are still the backbone of complex operations like loan origination and management. But with the accelerating need for automation in loan management system workflows, many outdated systems are struggling to keep up with the demands of today’s customers. 

For lending professionals, loan management and origination software try to fill in the gaps. But modern lenders need more: like online loan applications, mobile lending apps, post-closing workflows, and other features that aren’t “core” to traditional lending software. Tacked on as an afterthought, lenders need to cobble together too many workarounds to achieve the magic of automation consumers enjoy in other industries—and now expect from us all. 

The top benefits of loan management system workflows for lending professionals 

Using workflow automation, tasks that typically require manual intervention are instead handled digitally. Software performs processes that involve humdrum repetitive tasks, paperwork handling, and information collating. Brokers and lenders are using automation to reduce loan processing time by up to 80%. Here’s how it helps speed up operations: 

  • Allows customers to apply conveniently via laptop or smartphone
  • Fast-tracks approval times by booting manual, hands-on procedures from the process
  • Keeps more accurate records by reducing human error
  • Standardizes customer data collection
  • Improves the overall customer experience 

Is your team focused on improving manual methods for processing loan applications by hand? It’s time to make the jump to an expert in workflow automation. See how a platform like ProcessMaker can transform your loan servicing processes. 

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Loan applicants prefer a snappy, intuitive user experience

In many instances, customers can run across online applications that feel reminiscent of Geocities or Windows 3.1—an instant turn-off for digitally native web users. In fact, 75% of consumers say they judge the credibility of a business based on their website’s features. Archaic, non-intuitive loan applications are simply not a platform customers feel comfortable sharing personal information with. An easy-to-use, streamlined application process customers can use via a smartphone doesn’t just look sharp—it inspires greater confidence in your customer base. 

Automation eases the pressure of manual data collection 

The manual collection of customer data is a process that 56% of bankers decry as their biggest challenge in loan initiation. Automation helps reduce these pain points by: 

  • Using a technology called machine learning, software can “read” uploaded documents like business financial statements, proofs of address, and identity documentation like a passport or driver’s license. The information is then automatically populated into form fields—no need to key it into a spreadsheet manually. 
  • Automation standardizes loan applications, ensuring that every applicant fills out the same exact information. This makes data easier to collate and audit down the road. 
  • Workflow automation also eliminates the need to manually transfer data between systems like creditworthiness, data storage, and Know-Your-Customer checks. With all of your customer information stored in one hub, you’re able to create what is known as a “Single Source of Truth.” You’ll always pull data from this central repository, eliminating redundancies and errors. 

Software can take on a great deal of administrative heavy-lifting when it comes to loan underwriting. It’s no wonder why 72% of loan originators highlight this area as a critical priority target for improvement.  

Move applications more quickly through your systems with loan management workflow automation

Workflow automation helps you do more than just collect the data. It turns it into something you can act on

Customers can fill out a form from their smartphone, and digital helpers automatically pass the information between systems. How? By using business rules. Business rules codify your thought processes and turn them into digital steps that software can automatically complete. 

For a simple example, a business rule can check what an applicant has selected from the “State” field and automatically reject applications who live in locations not serviced by your team. 

A business rule can automatically approve applicants above a certain credit score or send those that fall into a range you’ve deemed questionable over to a specific team member. 

Business rules reduce the manual interference for your team to come to a decision, expediting approval times—something highly demanded by today’s loan applicants. 

Expedite loan decision-making

What is the top customer complaint during the loan process? According to 59% of applicants, it’s how long it takes from initiation to approval. At some point, it becomes impossible for manual ways to keep up with the speed of automation, removing automation-hesitant executives from popular and profitable opportunities like instant loan decisioning. 

In one Gallup survey, 28% of mortgage borrowers indicated that they were asked to supply the same document on multiple occasions during the lending process. Snags and bottlenecks like these not only frustrate customers, but tag extra days onto the already laborious processing timeline. 

In the end, automated systems can compile all of this information into a credit presentation to expedite decision-making. Instead of spending your time seeking out paper forms and rekeying information from your CRM into a decisioning template (and stumbling across a few errors late in the game!), an automated workflow can pull this information together into a foolproof report. For simple scenarios, computers can review the information and generate an automatic decision. 

In a 2016 survey published by the Federal Reserve, applicants ranked a “difficult application process” and a “long wait for a credit decision” as the main causes of their dissatisfaction with a loan provider. The complexity of modern loans is quickly outpacing traditional methods like Excel spreadsheets and LOS/LMS, now unable to keep up with best-in-class automation features. But, with a leading workflow system for loan management, you’ll have everything you need to make the most of the power of automation. 

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