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The use of Lending Systems (LOS/LMS) in Financial Institutions

The use of Lending Systems (LOS/LMS) in Financial Institutions

The use of Lending Systems (LOS/LMS) in Financial Institutions

The last couple of years has been disruptive, to say the least, to almost every part of our lives due to the COVID-19 pandemic.  With social distancing measures and lockdowns becoming the new normal, the traditional way of doing business, particularly in financing and lending – in-person branch visits with manual paper-based processes – just isn’t cutting it any longer for a lot of businesses.  

Renewed COVID-19 outbreaks due to Omicron or new virus variants will likely continue to further accelerate the digital transformation of financial service providers. As the result, offering loans digitally has become a matter of survival for lenders in today’s world.  

Digitalization and automation technologies will help financial institutions to enhance their customer acquisition and retention while lowering operational costs.  

Digitalisation, Automation: Implications for FIs

Banks NBFIs Insurance Funds
Improved efficiency, customer acquisition and retention Improved customer acquisition, underwriting quality, efficiency More efficient sales and claims processes, enhanced pricing of risk Declining commercial real estate valuations in investment portfolios
Better access to customers in underbanked emerging markets Competition from banks remains fierce Declining commercial real estate valuations in investment portfolios Portfolio diversification should limit the impact, particularly in the long term

Source: Fitch Ratings

Many steps in the loan origination process are highly labor-intensive for financial institutions, as well as time-consuming for loan applicants.  These include document collection, customer authentication and verification, credit decisioning, and regulatory compliance. 

There are many benefits and competitive advantages when the loan origination process is digitalized and automated. Such as:

Operational cost efficiency:

  • Reduces labor-intensive manual loan processing steps leading to greater cost savings 
  • Big data and analytics solutions provide speed to decisioning and better-quality loans, lowering delinquencies and collections activities.  
  • The automated collection process improves the data quality and accuracy resulting in fewer human errors that must be corrected later 
  • Better fraud detection and risk management via machine learning algorithms 
  • Enables agility, scalability, and optimal system integrations 
  • Smart business analysis via BI systems

Revenue optimization:

  • Increases loan throughput as the result of the digitalization of repetitive tasks through RPA (robotic process automation) technologies 
  • Tailor-made and more concise loan offers based on individual borrower profiles
  • Cross-selling opportunities for other financial services

Customer experience:

  • Access to financial products and services from any place at any time via a multi-channel interface 
  • Simple application process without the need for in-person interactions
  • Greater repeat customers as the result of faster loan decisions and disbursements increasing customer satisfaction

Companies that are adopting technologies and leveraging automation are witnessing a surge in their top and bottom lines.  Our LOS/LMS solutions can help financial institutions to create custom-built products, enhance onboarding experience through minimized process complexities, optimize operational workflows, and securely automate the entire lifecycle.

Making the loan application, underwriting, credit decisioning, and loan funding more efficient, streamlined, and responsive.  With our low code LOS/LMS solution, you can easily configure and add new product features without having to write complicated codes.  

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