How to Implement Loan Decisioning Software Correctly for Banks & Financial Institutions

Lenders are only able to handle a certain number of loans due to insufficient or inefficient financial technology. Additionally, it raises operating expenses, which are easily avoidable by using current technologies. 

According to research, the average lending institution could generate 15-20% more loans if it had a flexible, scalable lending software platform. The cost of this transition would be entirely covered if operational costs were reduced by 20% at the same time. This would result in a significant rise in profit margin. 

Lenders dislike using new technology for a variety of reasons, including as the expense of getting started, the challenge of staff training, and a preference for their current user interfaces, notwithstanding how limiting they may be. However, loan decisioning software provides a superior substitute that enables these businesses to have their cake and eat it too. How? Read on. 

Create unique processes for processing loans

The lending institutions of today deal with a variety of loans, some of which may need specialized and intricate procedures. For processing conventional loans for consumers and enterprises, loan origination software (LOS) solutions are frequently adequate. However, they lack the complexity and adaptability required to manage loans and other financial services for business mergers and acquisitions, private equity financing, and other specialized lending services.

These more tailored workflows may be created by decisions, and they can also be deployed more quickly so that lenders can respond to the changing needs of their customers. Loan processing is accelerated through faster and more effective workflow development, which reduces operational costs and boosts productivity. 

Adaptation to your current LOS 

Even though choices can completely replace LOS software, many lenders prefer to stick with their existing systems. Instead, they might prefer to connect to an existing LOS using choices so they can enhance the functionality and processes of their present LOS interface. 

By enabling you to integrate workflows and case management features to any stage in your LOS, Decisions makes this simple. The features and user experience you now have can be kept, but you can also add the contemporary solutions you require to stay current and satisfy your consumers’ expectations. 

To assure compliance and data security, use business rules

Any software that maintains customer data or lending processes must take into account the numerous regulations that apply to lenders. Lenders aren’t allowed to employ software that puts them at risk of infringing any laws, including those governing residential mortgages, selling insurance, the Consumer Financial Protection Bureau, and other federal and state regulations. 

Lenders have complete control over the rules and functionality of the program thanks to the business rules engine that comes with choices. In any scenario that the loan decisioning program may encounter, you can define as many intricate rules as you require to ensure regulatory compliance. Decisions can be modified in accordance with business rules to exactly fit their requirements. 

Enhance consumer communication across the loan and application processes

Faster loan processing and greater results for your customers are made possible by improved lending workflows. However, a well-thought-out loan solution also enhances internal cooperation and communication. As a result, you may communicate with your clients more effectively as they wait for approvals and other activities to be completed. 

You may be more receptive to the requirements of your clients by providing better, more effective service. Additionally, you’ll be better equipped to assist your clients however they see fit by utilizing loan options that can be altered to suit any need. 

Although banks and other financial institutions have been reluctant to replace their outdated technologies, new platforms, such as loan decisioning software, enable them to modernize their infrastructure without having to alter all of their internal software.