Undoubtedly, the loan origination process is pretty complicated and highly segmented. Earlier, lenders used to do manual handling, which ended up with an enormous number of errors and delays. It’s vital for the banks to eliminate the traditional working styles and adopt modern techniques to increase efficiency and productivity. With the introduction of cloud-based lending software, lenders can optimize their operations, reduce costs, and improve the speed of the application process.
What were the Challenges in the Traditional Loan Origination Process?
- The use of a great amount of paperwork makes the work time-consuming and error-prone.
- Earlier, there were many types of loan products, having different credit underwriting requirements & workflows. This is used to create tremendous confusion.
- Verification of customer information was a big deal and often led to minor errors, which became major issues.
- Loss of documents was also a major problem. No matter how much the management tries to be effective, the loss of customers’ private information has created big problems.
- The workload was unbalanced, which resulted in delays.
- There were delays in the manual screening process as the right documents were not passed to the right party timely.
Pros of Using Cloud-Based Lending Software
➤Flexibility and Accessibility
With the use of cloud-based factoring software, employees can access the software from anywhere. All it requires is a good internet connection. Even the real-time updates allow lenders to respond timely. Flexibility and accessibility are what every financial institution is looking for.
➤Scalability and Capacity Planning
Another amazing feature of cloud-based software is that it allows you to buy additional features and functionalities if required. This keeps the business updated with the current methods & processes. Even the cloud-based lending software features unlimited users or branches, which is helpful when the financial institution is planning to add employees or expand its operations geographically.
➤Document Storage and Sharing
Cloud-based loan document software reduces the great use of paperwork in the loan origination process. This issue we have mentioned above in the barriers of the traditional loan origination process. The files are stored in a centralized location which allows lenders to have access anywhere and the latest version. Hence, there will be smooth communication, costly errors, and unnecessary delays.
➤Role-Based Access and Features
Using a cloud-based platform gives you the opportunity to purchase the appropriate features that are related to the organization’s needs. For instance, post-closing, auditing capabilities, etc., are important banking functions for lenders. With the role-based assessment feature, each employee can view or edit the information as per their authority or job task. Hence, reducing confusion and increasing security.
➤Collaboration and Communication
The staff can have access from any device, which enhances collaboration and makes sure to have seamless communication. Today’s cloud-based loan origination software offers configurable multi-user collaborating features. Moreover, the documents can be updated or edited without refreshing, so you prevent the risks of file lockouts or slowdowns.
Using cloud-based lending software, the financial institution can increase productivity, improve customer experiences, work on cost-efficiency methods, shorten the application process, deal in high security, and minimize small to major errors.