Quick Guide on How To Automate Your Lending Processes
Updated: Nov 29
The alternative lending market is expanding every year, and the capability for people to tap into its potential is growing even more inclusive. There’s a lot to be excited about, from the development of P2P lending apps for people to use and create, to expert predictions that forecast that by 2023 we’ll see the market’s size at over $390 million.
However, for businesses to reap the benefits of the market, making the lending processes as smooth and competent as possible is key. That’s where automated lending processes are vital to success. In this article, we’re going to give you the information on the tools that automate lending processes, how they can help in different areas of business and the potential benefits they can provide. There’s a lot to learn, and Invatechs is here to guide you through that journey.
WHAT ARE AUTOMATED LENDING PROCESSES?
Simply put, automated lending processes refers to the software, tools and technologies (the AI infrastructure of a business) that make lending easier. Collecting and inputting data and financial entries on to a spreadsheet can be an ineffective and time-consuming project. You can also soon realise you’ve collected mountains of paperwork, and find your lending processes and systems as a result are clunky! Automated lending processes can alleviate these burdens. This could range from tools that grant digital signatures, to software that provides secure payment gateways – we’ll go into the details of these tools further on. Automation has become an industry buzzword - and for a good reason.
WHAT DOES THE RESEARCH SAY ABOUT AUTOMATION?
There’s already an abundance of research that shows just how cost-effective and productivity-boosting automation can be for businesses. With the market constantly expanding, some traditional banks have fallen short of their digital potential. In fact, data collected by SME Finance Forum found that in 2018, a funding gap of $5 trillion between SMB’s financial needs, and the institution-based finances available to them, caused SMBs to seek alternative means of funding. A survey done by MIT and BCG also found that AI deployment plays a crucial role in maintaining leading positions in the market. That’s why digital automation plays such a key role for lending companies to survive and thrive in the digital age.
Automation can have a big impact on businesses’ finances too. 45% of tasks can be automated according to McKinsey, which equates to $2 trillion worth of employees’ salaries. Not only that, IDC found that 20-30% of annual revenue is potentially lost because of manual procedures. Operational costs can be reduced by 10% and profitability improved by 8% for companies that utilise Big Data analysis technologies. Integrating automation into your business and diminishing the need for manual procedures clearly has payoffs and delivers results.
Automation and its potential has existentially grown and imbedded itself into companies’ operations over the last few years. Credit loan approval processes are reduced to a matter of minutes through online software calculations; as opposed to the 45-60 days a bank can take to process that information. When you click onto a website you may come across a chatbot feature, which one-third of respondents considered to be an effective communication portal. Reporting process analyses can be facilitated with the integration of third-party tools, which again streamlines and maximises efficiency. There’s so much breadth and depth to automation, but it’s clear that its integration has the power and capabilities to save money, time, and cement a company’s prowess in the digital field.
With all this in mind, let’s take a look at how automated lending processes can specifically help you.
HOW CAN AUTOMATED LENDING PROCESSES HELP ME?
So automated lending processes can cover a wide range of approaches and focuses. Not only that, you’ll find different tools that will help you achieve your digital lending goals. Some of these tools can intersect and distribute their utilities into different focuses of business. Let’s break down some of these areas, see what’s available and what’s best for you.
CUSTOMER SUPPORT & ACQUISITION
It goes without saying that customers want quick solutions to their problems and excellent communication portals. As a business, you might be looking for an application that can provide that, alongside automated marketing and data collection. Finding a CRM software that can concentrate these areas of customer support and acquisition into one platform will be one of the most effective steps you can take.
Autopilot and Salesforce are two potential applications.
Autopilot provides a number of features including:
Integrated social media and channels of communication (Facebook, MailChimp, Slack etc)
Email marketing software (customer segmentation and A/B tests)
Automated repetitive tasks like booking appointments, signing leads and educating new subscribers; automating customer journeys without prerequisite coding skills
Professional assistance provided in the set-up and fine-tuning phases
Monthly payments can vary greatly from Silver membership to Platinum, which means you can tailor your subscription to what you want and need.
Salesforce is a similar tool that automates lending support and houses your documents on a main platform. Features include:
Trailhead – a feature that lets you learn all about CRM, sales, services and other topics with overviews and in-depth analyses
Salesforce is available on a mobile app
Einstein Activity Capture allows you to track emails, calls and meetings automatically
Weighing up the pros and cons is important in deciding which application to go for. A lot of CRM softwares provide similar tools and features, so it’s important to consider which application best suits your needs and budget. However, Salesforce is the world’s #1 CRM application, has bespoke features and software, and comes at a lower cost than Autopilot.
You’ll want loans to be secured quickly and safely, but of course, manual checks and networks of communication can slow things down. Integrating digital signatures is another form of automated lending that makes the whole process smoother.
Two digital signature tools worth exploring are HelloSign and DocuSign which allow you to add legally binding signatures to your documents.
HelloSign was created by Dropbox and can be implemented into web interfaces through high-performing APIS or a Salesforce extension. Users are able to make their own signatures to sign different documents, including loan applications, credit agreements as well as e-docs. A free trial is available, and packages start from $13 a month.
DocuSign functions as a similar tool to HelloSign, and is the world’s #1 portal for virtual document signing. Pricing starts from $10 to $40 a month depending on whatever features you want to integrate.
They’re similar tools, both at great prices, but there are a few key differences to bear in mind. DocuSign works with all company sizes including freelancers and comes with a mobile app available on IOS and Android. HelloSign doesn’t work with freelancers, nor does it have a mobile app; but is compatible with Dropbox and supports 17 popular file formats. Deciding which tool extension works best for you will come down to cost, company size and the business systems you already use. Make a comprehensive comparison before you decide, but DocuSign looks like the winner for most people.
RISK EVALUATION AND SECURITY
It’s vital you have a secure payment gateway; you don’t want external threats or activities to access vital information. There are some great tools and platforms that ensure secure and compliant payments.
Goji and LemonWay are two particularly good systems.
Goji’s features include:
Integrated KYC, AML and transaction monitoring capabilities that scales with your growth – whether you’re putting through one or one million transactions
Personal data is encrypted, and access to information and internal Goji systems is authorised to Goji personnel only
External penetration tests are conducted annually to verify the platform’s security
LemonWay is a reputable and reliable payment platform that offers similar features to Goji. It’s been on the market since 2012 and offers a range of features including:
Professional, personalised assistance
OCR-based tools (Optical Character Recognition)
A customised payment page you can use for conversion rates
Goji is particularly geared for alternative lending firms and FinTech startups. However, LemonWay’s automatic identification of users meets the European standards of KYC/AML, general data protection regulation, as well as third-party payments. Furthermore, feature-rich APIs allow clients to track and monitor users’ activities and commissions. What does all of this mean? In basic terms, LemonWay is a great tool for competing in the crowdfunding market; Goji is more popular amongst retail investors.
You can see there are lots of tools and potential avenues for automated lending processes. Whilst a lot offer similar features, it’s important you weigh-up what features and integrations will work best for you and your business. Nevertheless, there’s time and money to be saved when these tools are built into the infrastructure of your company’s technology.
At Invatechs we’ve got a wide range of advice and information to help you with your digital needs. From money-saving advice to guidance on how to build your own mobile banking app. Reach out to us today for a free consultation and demo, and let us help you harness all your digital potential.