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Automated loan underwriting is a significant time saver for lenders. However, it only manages 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 allow borrowers to complete forms and upload documents directly to the lender’s system. These relatively simple apps can help 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 eliminates errors and delays in the collection of customer financial data and other required information and documentation.
Mobile application program interfaces (APIs) are versions of widely used, customer-facing web portals. Similar to web applications, the mobile app facilitates on-boarding of customer data directly to the lender’s platform. It immediately reduces the time and potential for errors in the process of gathering information from the customer and entering it into the loan origination platform, traditionally done by hand.
By entering data directly onto the mobile platform, the customer becomes a key part of the process. Status of loan applications, alerts about missing or incomplete information, and most communication with the customer can be managed automatically. Furthermore, using a mobile app allows customers to check on the progress of their loan applications at their own convenience. Thus, mobile apps have great potential to expand and improve customer relationship management. 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. Mobile and web-based apps can provide virtually instantaneous status updates by allowing the system to automatically review information according to preset rules. This has several benefits.
First, mobile and web-based apps create a “single source of truth.” Creating a centralized location for data eliminates the guesswork of determining what information has been received and which processing steps have been completed. In addition, the automated loan origination application gives multiple departments access to the same customer information and documents in the centralized database.
Second, mobile apps speed up the overall lending process 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. In effect, 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 both customers and personnel raise concerns about confidentiality and data integrity.
To preserve confidentiality, mobile applications provide robust user identity and access protocol tools within the system. Access protocols can be customized for the lender’s specific security needs and standards. Thus, these features are able to solve the security limitations of open access file directories.
Properly used and maintained, these security tools also protect the integrity of customer information from outside intrusion or internal misuse. Given the strict audit and control standards applied to financial institutions, developers of mobile solutions integrate 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.
Finally, effective security controls are especially important in the newest, automated loan origination and underwriting programs. Through the use of web portals, recent technology allows lenders’ systems to directly interface with customer systems and systems the customer is linked to, such as other banks. 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.
Mobile apps for loan origination are often integrated with existing systems or applications. 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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