Digital loan origination systems cover the loan lifecycle from application to disbursement into the customer’s account in a seamless manner. They are transforming traditional lenders into intelligent digital lending enterprises, by maximizing the digital driven processes in the automation of the loan origination cycle. Let us explore the benefits that  a Digital Lending Platform brings to the table. What is in it for the lenders and borrowers? How does it disrupt the traditional lending landscape?

Optimisation of Loan Life Cycle

Digital Lending technology thrives on process speed. The submission of a digital loan application along with uploading of relevant documents is the starting point which sets the entire digital lending process in motion. Decision rules evaluate the application in seconds. Background checks access credit bureaus to assess the credit worth and financial strength of the borrower. Employment details are also cross checked in the background.The platform calculates the optimum loan terms based on applicant details and risk factors. Credit bureau reports throw up credit history and past defaults which can help to reduce lender risk. Fraud analytics is also carried out using various AI based technologies. Within seconds of loan approval, the contract is generated which can be signed electronically. The upload of bank details and verification through penny drop ensures that the loan amount is credited to a valid bank account. The entire process is accelerated because of the seamless integration and leads to considerable cost and time savings.

Easy capture of Applicant information

A digital loan application eliminates geographical barriers and the need for physical movement. A borrower can originate a loan application from any place at any time. Once the borrower fills in his name and the loan product he is looking for, he can just upload his identification documents. The platform can smart fill the application using OCR. This minimizes human error and ensures completion in seconds. Even the bank statements can be scanned digitally and analyzed in seconds in the background. These features are designed to provide a highly customer friendly experience.

Quicker Decision Making

The business environment is pretty dynamic and the digital revolution has ensured that everything including loans get processed instantly. Nobody is prepared to wait for days or even leave their chair before it is complete.  Any delay in loan evaluation and approval will simply drive the customer to the competitor; no lender wants to risk that in a world of cut-throat competition. Digital lending platform allows lenders to automate the decision making process to simplify the procedure. A single, seamlessly integrated digital lending platform ensures  that lenders can quickly run the application through the process of background checks and verifications instantly. Auto decisioning ensures that customers can get a response quickly after applying. In conjunction with design and other desired features, the digital lending platform  provides a seamless application and decisioning process.

Consistency

Digital lending technology replaces human judgement with decision rules which lends a consistency to the process. A system of workflows and auto decision rules ensures that the applicant is evaluated as per the permissible risk limits and the optimum loan terms are made available to the customer. This offers a certain degree of consistency as there is no human bias or error involved. The software just follows pre-configured rule sets and applies loan origination processes and credit policies consistently.

Comfort across Devices

Availability of the Digital Lending Platform on smartphones is mandatory as that is the device which has the maximum reach. The millennials use their smartphone for all their activities and they prefer doing their financial transactions on it too. They prefer to have the convenience of banking or taking a loan anytime from anywhere. They like a one stop solution with minimum manual data input and fastest turnaround time from loan application to money in the account. They are difficult to please and will not think twice before abandoning the loan application and moving to the next lender if they have an uncomfortable experience.

A good onboarding solution will allow customers to move from 1 device to another to complete the loan application form, across web and mobile interfaces.

Perfect for first time borrowers

First time borrowers find it easier to use a digital lending platform. They are mostly millennials who are comfortable with automation and use their smartphone for all their transactions. The digital platform streamlines the entire lending process while the features are user friendly and require minimal manual input. The decision rules ensure that loan applications are processed without human bias or error and makes the entire experience efficient, effective and enjoyable.

Compliance with Rules and Regulations

RBI’s regulations for Banks and NBFC’s for Lending are to be met by the systems that handle these processes. Software providers of Digital lending platforms must ensure that their systems are compliant with these regulations and help the lending companies focus on their business growth only. Lending companies also must ensure that the software providers are informed of all latest guidelines issued by the Regulators to quickly incorporate them into the loan original systems.

Power of Analytics

Analytics helps the lender to track customer behaviour and understand the market trends which can be analyzed to provide detailed insight about the lending process. Over a period of time, this analysis helps lenders to anticipate and allocate appropriate underwriting resources to accommodate seasonal demands. It also gives the lender a fair understanding about loan sources, demographics, credit tiers and other inputs which can drive market strategy. Analytics can also throw up vital information regarding decision bottlenecks and scope for process improvements.

Improvement in Business Efficiency

Lender resources can be deployed towards looking at new opportunities while the loan process is completely automated. Over a period of time, digital lending platforms reduce overhead costs by 30-50%.The normal manual lending system of loan disbursement was painful for both parties – the lender and borrower, alike. It had too much dependency on human resources and involved physical interaction at each step. The customer had to make multiple trips to the lending institution and provide numerous copies of various documents and manually fill out several forms. These forms were manually verified by the officers at the lender’s premises before a final approval was given and the loan disbursed. The entire process took up several man days and was subject to human errors at every level.  The evolution of the digital lending platform is a paradigm shift in the leding landscape and the benefits are too huge to be ignored. The digital lending software covers the entire loan lifecycle from application to approval and creates a far superior customer experience. It is a win-win solution for both the lender and borrower as it results in considerable time and cost savings while not compromising on risk and quality of customer experience.

Rationalization of Loan Underwriting 

All lenders need to use underwriting efficiency and decision quality to optimise returns. Digital lending software permits applicants to submit all information and proof online which eliminates paperwork and manual procedures. This saves time which can be utilised to engage clients in non digital relationship building activities which keeps customer service top notch and ensures a human touch. 

Digital lending software is equipped to sync in data from credit bureaus, banks etc. to ensure  that all uploaded data and documents are verified. Decision rules and underwriting algorithms are then used  to determine whether the loan application passes the risk test. A combination of artificial intelligence and machine learning ensure that the digital lending software offers better underwriting expertise than human judgement.

Conclusion

Digital Lending Software has changed forever, the way lenders do business and the way customers look at loan procurement. Lenders can implement a fully-digital loan origination process using the latest innovations offered by digital lending technology. Easy application submission, quick approvals due to auto decisioning, compliant lending processes, and the ability to continually improve process efficiency are a must for a great lending platform. We, at Celusion Technologies have packaged the latest features on our Digital Lending Platform which makes it a desirable product to have, if you are in the business of lending. Please visit us on www.celusion.com for more information and we will be happy to customize a lending solution to meet your needs.