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Automated loan underwriting is a significant time saver for lenders. But it really does manage only one step in a potentially lengthy review process for a complete loan file. The processing of a loan file begins with collecting, organizing and verifying loan information.
Lenders of all types are discovering that one way to streamline processing is to use a mobile app. Mobile apps for lending allow borrowers to complete forms and upload documents directly to the lender’s system. These relatively simple apps can help to shave days off the underwriting process.
According to CSI’s annual study, bankers see mobile apps as the source of new customer acquisition (24%), following loans (39%). Download: CSI’s 2019 BankingPriorities Executive Report here.
Improved Data Collection
One of the most obvious advantages of automation is that it can virtually eliminate errors and delays in manually collecting customer financial data and other required customer information and documentation.
Mobile application program interfaces (APIs) are versions of the by now familiar customer-facing web portals used by many lenders. Just as the web application, the mobile app facilitates on-boarding of customer data directly to the lender’s platform. It immediately eliminates the time and potential for errors in the manual process of gathering information from the customer and entering it into the loan origination platform by hand.
Through the digital on-boarding initiated by the customer, the customer becomes a key part of the process. The status of loan applications, alerts about missing or incomplete information, and most other communications with the customer can be managed automatically, with the customer able to access these at his convenience. Mobile apps can broaden and improve customer relationship management, without adding and in some cases even reducing the amount of human effort needed to do so. Read more about benefits of loan lending mobile apps to end users here.
Check out how finetchs are leveraging the mobile apps for lending here.
The use of mobile and web-based apps for loan origination creates a central repository of customer information, which has several benefits. First, it eliminates the guesswork of what information has been received and what processing steps have been completed.
Using either a simple checklist or allowing the system to review it automatically according to preset rules provides a virtually instantaneous status update. The automated loan origination application also gives multiple departments access to the same customer information and collected documents through the centralized database.
Having the customer information on hand creates a “single source of truth“. It streamlines processes and customer relationship management in areas beyond loan processing. Another way in which mobile apps can speed up the overall lending process is by extending remote access to the customer database and individual loan files.
Decision-makers can monitor and direct the process using smartphones or other mobile devices. This saves time in overcoming problems requiring executive judgment and even in rendering final loan decisions.
The security of customer information is paramount in the financial industry. Naturally, applications that allow multiple-point access to customers and personnel alike cause some concerns about maintaining confidentiality and data integrity.
Mobile applications for lending manage these concerns with robust user identity and access protocol tools within the system. Access protocols can be customized for the lender’s specific security needs and standards. This effectively addresses the handicap of open access file directories, which have limited security capabilities.
Properly used and maintained, these security tools effectively protect the integrity of customer information from outside intrusion or misuse within the lender’s own system. Given the strict audit and control standards applied to financial institutions, developers of mobile solutions build regulation-compliant measures into their systems.
With a good product, the lender need only concern itself with adding any enhancements required by its own in-house security protocols. Effective access and security controls are especially important in the newest and most advanced loan origination and automated underwriting programs. This enhanced technology allows the lender’s system to interface directly with a customer’s own system and systems the customer is linked to, such as other banks, through web portals. This greatly accelerates the verification and underwriting processes by allowing the lender’s system to automatically gather relevant data from customer accounts, accounting management software, tax returns and other sources. This, of course, requires specific and carefully managed system permissions.
The mobile apps for loan origination integrate with the existing system or applications the lender already has, which is mainly a matter of economy and practicality. Integration with existing systems avoids the cost of expensive digital infrastructure and eases training and familiarization with the new systems.
System integration also allows a lender to control the pace of scaling up to full automation. For example, a lender may wish to start with deploying the loan origination app alone, speeding up that part of the process. Later, when it is justified by the volume of work, the automated underwriting and other parts of the process can be added seamlessly to the system.
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