Digitising lending is crucial for lending providers for several reasons. Firstly, the loan business is the core business of many banks, and it has steadily increased over the years.
28 March 2023
Nicola Hirzel, Lending Specialist at Atfinity
From Manual to Automated:
Transforming the Lending Process with Atfinity
Having spent years in the banking industry, particularly working in the SME lending, I can personally attest to the value of a process orchestration tool like Atfinity. In this blog post, I'll explain why I believe this tool has become essential in the lending industry. By sharing my personal experiences and insights, I'll demonstrate how Atfinity can help lenders to streamline their processes, reduce costs, and provide a better customer experience. Through my firsthand knowledge of the specific problems that lenders face, I hope to provide a personal perspective on the benefits of this tool.
Why lending providers need to digitise
Digitising lending is crucial for lending providers for several reasons. Firstly, the loan business is the core business of many banks, and it has steadily increased over the years. Secondly, there is an increasing cost pressure as well as rising customer expectations, which require a complete digitisation of the credit process to stay competitive. However, according to PwC the current degree of industrialisation of the credit process is only around 40%, and in some institutions, it is even lower, meaning that even the simple processes such as the loan origination process are not yet digitised.
Benefits of a Process Orchestration Tool
From my personal experience in lending, I've found that there are several areas where a process orchestration tool can make a significant difference:
Cost Reduction
The right process orchestration tool used correctly, can provide very significant cost reductions. By automating manual tasks and directly integrating with all relevant other software systems it reduces the effort and time required. Here at Atfinity, I have experienced these cost benefits firsthand.
Instant Risk Calculation
By automating the risk calculation process, orchestration tools can provide almost instantaneous risk assessment. Credit scoring models and data from various sources such as credit bureaus, underwriting systems, and core banking systems are used to determine the borrower's creditworthiness and the appropriate interest rates and terms. As a result, lending providers can offer loans faster, which provides a better user experience for their customers. In a highly competitive market, speed can be a USP for lenders.
More Detailed Risk Calculations
Loan origination tools can utilise a wide range of parameters and generally connect to all necessary data sources via APIs to offer more accurate and comprehensive risk profiling. With a more detailed understanding of the borrower's risk profile, lending providers can better assess their ability to repay their loans. This ability also allows lending providers to digitise more complex credit facilities.
New Distribution Channels
Additionally, loan origination tools enable lenders to explore new distribution channels and business models. Lenders could, for example, offer a website where customers can apply for a loan directly, providing a convenient and user-friendly option that caters to the digital age. Furthermore, lenders can extend their offerings to professional third parties by providing them with APIs or specialised user interfaces. By embracing these new distribution channels, lenders can expand their customer reach and ultimately, grow their business.
Conclusion
In conclusion, process orchestration software enables loan providers to streamline their loan origination process, reduce costs, improve efficiency, make fast and reliable loan decisions in real-time and even grow their business in novel ways.
If you're looking for a process orchestration tool to improve your loan origination process, Atfinity is an excellent tool to consider.