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Manual underwriting processes make typical commercial loans (especially complex ones) extremely time-consuming for community banks and credit unions to analyze and underwrite. Financial institutions and lenders that use digital technology and tools, supported by risk assessments and artificial intelligence (AI), can process loans much faster and more efficiently.
Companies that specialize in digitally automating financial processes bring the power formerly available only to large conglomerate banks to the community bank and credit union industry. Cloud-based underwriting platforms, like MonJa, help even small and medium-sized financial institutions achieve loan underwriting automation to provide higher returns, faster loan closing at less cost.
Commercial Loans in the Digital Age
Manual underwriting is time-consuming, and there are many inefficiencies associated with the process. It’s time-consuming for the credit team. It’s prone to errors and inconsistencies. It’s often too long of a process for a business borrower. We believe your credit team should spend most of their time on what they can do the best: analyzing the deals and not on manual statement spreading.
Loans under $10,000 are not worth the processing time with labor-intensive processes. Digital automated underwriting brings a cost-effective solution to grow your revenue stream and serve your community better. Loans are assessed and processed within hours, instead of weeks, with more accurate evaluation.
Savvy community banks and credit unions are making the shift to digital and automated underwriting. FinTech products that offer underwriting automation coupled with smart scan technology have improved banking processes.
Merits of Digital Underwriting
Moving to a digital loan processing method may create fear of the unknown. Traditionally, financial institutions are conservative with the policy change, thereby slowing the adoption of new technology. Automating the loans simplifies the overall process.
Your organization likely has some automated processes using database and spreadsheet technology. This method is somewhat trackable but has limitations. The biggest time constraint is manually extracting the data from tax returns and financials. MonJa Smart Scan Technology helps financial institutions to streamline commercial loan underwriting by up to 70%, compared to manual statement spreading with Excel. may improve loan processing time by 70%.
Automatic underwriting also expands the expertise of your credit team. The system behind MonJa Smart Scan technology recognizes and reads data from various file formats and quality. Once uploaded to MonJa portal – the information is extracted behind the scenes and financial ratios are automatically generated. The process takes up to 24 hours or less. This allows our system to flag data issues. For example, if the system identifies data fields with a low confidence score of the extracted data, the data field gets checked manually by MonJa’s analyst. This extra layer of human check allows us to have high confidence in the extracted data. The credit team does not have to manually review the data points which is a major differentiator of MonJa’s software compared to other vendors.
Risk Analysis and AI Software Benefits
AI is often misunderstood due to the complex nature of the process, but it makes processes more consistent and trackable. While it is true that errors from AI processes can occur, careful planning and working with expert consultants can improve outcomes.
AI risk analysis takes traditional parameters into consideration, including financial ratios, but adds complex algorithms from previous data to assign risk based on the past performance of similar loans. The local and federal requirements are entered as guidelines for assessment and can be adjusted as laws change.
The underwriting outcome is unbiased and based on legal requirements. This improves your financial risk mitigation while increasing the loan volume your company can offer to customers.
Getting Started with MonJa Statement Spreading Software is Easy
So what are some of the key attributes of MonJa’s offering?
- Cost. Pay-as-you-go and no implementation cost mean any size institution and lender can apply the powerful cloud-based portal for streamlining loan underwriting.
- Convenience. Portal access allows loan officers and members of the credit team to access data simply and securely from any type of device.
- Efficiency. With a 70% reduction of manual processing and a 20% increase in loan origination, your organization saves money while growing the revenue.
- Accuracy. Powerful AI algorithms and facility-specific rules create improved nonbiased loan decisions.
- Compliance. Keep up with legal requirements with highly trackable processes. Adjustments are easily made when laws change without the need to revamp current practices. Our portal is not a black box. We implement your institution’s credit policies and workflows while making them more efficient, yet transparent for audit and compliance reasons. You don’t have to scramble and disrupt your organization.
Request MonJa's Statement Spreading Software Demo
MonJa Smart Scan Technology speeds up commercial loan underwriting by up to 70%.