Some of the most common challenges to a lender’s ability to efficiently execute the loan origination process are:
Fragmented data ― Lenders frequently struggle to harness the information needed to determine lien priority position, especially when multiple parties are associated with a loan. Large search volumes and complexity can make it difficult to quickly identify UCC amendments, encumbered assets, and lien status, as well as analyze results from scattered data sources.
Reliance on manual processes ― Manual processes increase the likelihood of errors, while complicating and adding time to the onboarding process. Copying and pasting data into different systems further magnifies the risk of inaccurate data being recorded in multiple records. Manual processes can also reduce objectivity in review and decisioning.
Insufficient staff training and knowledge bank ― It is not uncommon for lenders to struggle to keep their employees properly trained on due diligence considerations that are specific to the organization, as well as apprised of critical yet everchanging compliance requirements. The resulting lack of subject matter expertise can hinder efficient decisioning.
Inability to scale operations ― Lenders that seek to expand their operations are often impeded by the limited capacity of internal teams. From meeting the increased volume demands of seasonal fluctuations to venturing into new markets, organizations may find it difficult to scale without adding headcount.
Implementing the right technology solutions can be instrumental in streamlining and optimizing the loan origination process, increasing efficiency and productivity, and enhancing the overall customer experience. By embracing tools such as automation, AI, and machine learning, lenders gain the ability to not only shorten the time and effort required for onboarding but also reap actionable intelligence to mitigate risk and make confident, fast decisions.
Leveraging automated business rules helps lenders achieve an organized chain of filing with the current status of collateral assets and parties for active liens, reducing the need for specialized training and making it easier to mitigate the inconsistency and delays inherent in manual data collection.
In addition, advanced technology solutions contribute to shorter turnaround times for loan approvals, more consistent decisioning, lower operational costs, and easy scalability to meet volume demands. Furthermore, in an increasingly complex regulatory environment, automated checklists and document tracking mitigate risk for lenders by helping to ensure standardization ― so every document is accounted for, accurate, and ready to prove compliance in the event of an audit.
Explore the many ways automated solutions can help you streamline and simplify the loan origination process in our eBook, “Technology: The key to accelerate and optimize onboarding due diligence.”
