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Maximize Efficiency: How Automation Can Improve Your Loan Origination Process

November 2018

Automation has become the latest industry buzzword, but what does this mean? How can automation streamline your commercial loan origination process, increase the productivity of your lending officers and make your customers happier? 


In the current commercial lending market, there are many software applications that serve the loan origination and credit assessment requirements of traditional and non-traditional lenders. Financial institutions are increasingly mindful of improving their practices in these areas to increase efficiency, decision speed, and productivity, and to enhance their customer experience.  

In this paper, we outline the challenges of traditional lending practices and examine each stage of the credit process to see how automation can improve and standardize  underwriting procedures.  

What we know already – Problem Diagnosis 

Commercial lending is about generating economic benefit through the funding of enterprises, while ensuring the lender can make a profit, create shareholder value, and manage risk. Assessing the creditworthiness of any business can be a challenging task. The tools a financial institution uses to do so can impact underwriting standards, timely approval, cost, and the scale of any unpredicted losses. By streamlining and automating the lending process, financial institutions are looking for applications that help them overcome these challenges, increase the quality of the loan portfolio, and deliver customer satisfaction.

Why are so many banks today struggling to achieve these objectives? 

Many lenders use manual and paper-based loan approval procedures that now seem out of step with a digitized world. As a result, they have slower decision times than what many customers want, and an internal data management problem that creates more work for bankers and causes opacity for both management and external examiners alike. 

Commercial loans can range in size and complexity.  Let us take one of the most commonly used manual underwriting methods, spreadsheets, as a typical illustration of today’s lenders’ challenge. Spreadsheets are great tools and probably one of the best single “go to” models of software today. Yet it was unlikely their creators had loan underwriting in mind when designing their application. 

Using a spreadsheet to underwrite credit in any form can be cumbersome. Data and financial entry can be time consuming and might lose uniformity over time. Data entered into a spreadsheet is sometimes reentered directly into a lender’s other core systems, doubling effort and creating duplicate records of the same data. From a storage, lineage, retrieval, and portfolio insight perspective, this method has  serious flaws. 

Related Solutions

Automating the process of financial spreading and credit scoring increases loan application volume and helps lenders make better credit decisions.

Information technology automates the credit assessment and loan origination processes to increase efficiency and profitability over the loan life cycle.

Proactively monitoring the financial health of borrowers and the risk level of your loan portfolio increases the profitability of your lending business.