How Digital Workers Can Help Lenders Maintain Their Market Share

The lending space has changed over the past decade, particularly when it comes to mortgage processing. 

Direct-to-consumer mortgage originations now boast a 25% share of the market, with customer satisfaction in the U.S. as much as 30% higher for non-bank entities than for banks.

These numbers send a clear message to traditional lenders that they need to improve their loan approval process. The best way to do this is by automating processes that are cumbersome and time-consuming to complete manually. Automation has the ability to overcome the many challenges associated with manual loan processing.

In this blog, we’ll explore how digital workers can help lenders stay in control of their market share.

The Challenges of Loan Processing

Once a loan application is received, it goes through a number of steps during processing and underwriting. Traditionally, this involves manually:

  • Checking each application to ensure all the required information is included
  • Doing a credit check
  • Calculating a risk score
  • Ensuring the application meets regulatory and legal requirements

This might seem like a short list, but each step of the process requires checking and verifying numerous documents, verifying the applicant’s identity and other key information, and other steps in the process require checking multiple documents and a lot of back-and-forth communication with the applicant.

All of this requires a significant amount of time when human workers are doing it manually. This slows down the entire loan approval process, leaving clients waiting longer than necessary for loan approval and to receive their funds.
In line with this, Moody’s Analytics states that 56% of bankers say the manual collection of data and communication with clients is their biggest challenge. With this in mind, it is important to consider what the automation of loan processing can bring to the table.

The Role of Digital Workers

Digital workers are software bots that are programmed to perform tasks that are easily defined, repeatable and follow a logical workflow. These bots are able to recognize different data formats and interact with a variety of IT systems, working alongside humans to accelerate the processing of loans.

The tasks digital workers can perform can include:

  • Check loan applications for incomplete or missing information
  • Verify and cross-check all applicant information
  • Perform data entry and auto-fill forms
  • Initiate the credit check
  • Conduct a risk evaluation
  • Manage collateral
  • Flag potentially fraudulent applications
  • Submit reports
  • Review and analyze documents for post-closing quality control

Human workers are still involved in the processing of loans every step of the way. However, their focus can be on customer relations and dealing with application issues that are flagged by the digital workers.

The Benefits of Using Digital Workers to Process Invoices

When loan processing tasks are automated, there are a number of benefits that both the lender and their clients enjoy. They include:

  • Reduced loan processing time: Automating loan processing makes it possible for a lender to process a loan within five minutes, as opposed to three to five weeks.
  • Lower cost of loan processing: Automating mortgage processing can reduce manual processing costs by as much as 50%.
  • Improved client satisfaction: Clients get their loans approved and the money in their bank account in as little as 24 hours.
  • Elimination of errors: Digital workers can track, reference, and pull the required data from multiple documents, ensuring no information is left out and that nothing gets lost.
  • Reduction in the processing of fraudulent applications: Digital workers come with a superior ability to identify and flag anomalies during the loan application process, lowering the risk of fraud.

Easy scalability: Automation makes it possible to instantaneously scale loan processing operations as the number of loan applications increases.

Loan Processing Use Cases

Automation transforms many different aspects of loan processing, ultimately improving the overall efficiency of the process. What follows are some examples of use cases where automation makes a significant difference when processing loans.

Increased ease obtaining third-party data

When processing a mortgage or any other type of loan, there is a lot of information that must be obtained from third parties, such as employment verification, credit reports, and appraisals. Manually submitting order forms to each third party, following up when necessary and reviewing and entering the information received into lender systems takes a lot of time.

Digital workers can be preprogrammed to automatically order the information from third parties and send out reminders. Once that information is received, it will automatically be reviewed and entered into the system. Ultimately, this relieves human workers from having to perform these tasks, so they can focus on higher-value tasks.

Detection of fraudulent loan applications

The fraud detection process involves many tedious steps to determine the level of fraud risk for an application. This is especially the case when it comes to mortgage fraud. Digital workers can bear the brunt of the risk analysis by:

  • Searching questionable loans for discrepancies that indicate risk
  • Reviewing severity alerts at the medium and high level
  • Accessing the required documents to verify severity alerts
  • Accessing external documentation to verify severity alerts
  • Updating findings and closing out the fraud analysis

This makes the fraud analysis and detection process almost entirely automated, removing any possibility of missed information and significantly reducing the chances that a fraudulent application will slip through. It also leaves employees adequate time to deal with those cases that are confirmed fraudulent.

Improved post-closing quality control

When a loan is closed, which includes the signing of all related documents and the funding of the loan, there must be an audit done on all closing documentation to ensure compliance. The review of this documentation can take a significant amount of time. However, this process can be automated to ensure: 

  • All relevant documentation is accounted for and checked for accuracy
  • Confirmed compliance with relevant regulations and the requirements of the mortgage insurer
  • The appraisal is complete and accurate
  • There is sufficient documented support for the underwriting decision

Plus, when the post-closing quality control process is automated, the lender can submit their reviews as they are completed, rather than having to wait to send them all at once. This helps ensure they will be able to complete the reviews within the allotted time frame.

Get Automation Working Right with Ampliforce

Traditional lenders need to pivot and embrace the technology at their disposal. 

Ampliforce has years of experience and team of experts ready to provide you with a complete end-to-end solution for your lending automation needs. Full training and support are provided and there is no need for third-party integrations

Book a discovery call today and find out how much faster and easier loan processing is with our digital workers.