Digital transformation of lending activity

The disease that struck the globe shocked the world. It has brought disruption across all fields of finance, and has led to the slowing or even stopping of processes considered important as well as normal. The lending world is not any different. In the post-COVID-19 era the sector is going through major shifts. The sector is required to be prepared to deal with the high-value and low-volume loans.

Mortgages from Bridge aren’t a lone exception. A growing amount of people who work at home, and they realize that having a house of a good size is a necessity. Mortgages for houses that are mid-sized in size are becoming more popular as they get cheaper. Social distancing policies that are now the norm since the onset of the outbreak have forced all mortgage lenders rethink their procedures. Although regulators and consumers were already asking lenders to cut down on the amount of spent with potential clientssince a huge percentage of them are unable access their offices and are not even able to visit their premises, the capacity to facilitate a smooth mortgage process is essential.

Everything from scheduling an initial appointment, to the process of evaluating credit scores and receiving approval must be done in a speedy manner. Additionally, the pressure to digitalize in the context of massive size is very real. The time needed to sign up clients must be reduced. The requirement for fast approvals, in conjunction with the projected increase in volumes, makes it nearly impossible for lenders to perform efficiently with manual processes. This is the reason the requirement to use automation, machines, analytics on customers, as well as other tools has become an absolute requirement “must be a must” instead of an “good to be able to” capability.

The ability to set the criteria for determining whether loans are automatically granted by a system will significantly reduce the costs related to internal processes that lenders use at times that offices are shut down and employees aren’t functioning at full capacity. This is the perfect moment to encourage institutions to move into the new digital world. This is a strategic decision that is made by the majority of lenders to ensure they are in a position to be able to adjust to the new norm. Prior to COVID-19 it was just being evaluated in certain areas of lending operations. The gradual and slow digital transformation was occurring. This transformation must be quick taking place. The traditional lender of the past need to be quickly transformed into an institution of online loans.

An internet-based method that focuses on investing in the best loans, as well as using automated and machine-learning techniques to provide customers with information regarding the eligibility of their loan and speed up processing and creation are only one of the ways to accomplish these.

The latest technology permits customers to make loans throughout the day, that allows lenders to conduct business from any location at any time and from any place. With the aid of technology the loan officers can quickly review more loans and evaluate their creditworthiness in just a few minutes rather than days with conventional procedures. Technology can dramatically speed up process of underwriting and back office and help lenders manage the massive increase in the volume of loans and respond quickly to requests for loans from borrowers, and all while adhering the guidelines and rules they have set.

Imagine a world in which the window for credit applications do not close. Imagine technology that’s able to determine immediately whether the applications meet or don’t meet the criteria needed to be creditworthy for any loan. Loan documents are sent electronically to be electronically signed and then returned to finance, processing or reservation software. The system has the possibility for multiple individuals making their own offers simultaneously. The entire process is recorded and saved in a safe location to be used for audits and compliance purposes . The information can be exported in any format at any time. It is utilized as an industry standard.

As you would expect from a computer , the usage of technology online is increasing at an accelerated rate! “It’s an exponential curve that’s not going to “flatten” in the next couple of years,” and I believe that.

About Geraldine Higgins

Check Also

Hovde Group expands its custody team with the addition of an investment banking group led by veterans Craig Mancinotti and Rick Maroney

CHICAGO–(BUSINESS WIRE)–Hovde Group, LLC (“Hovde”), a leading full-service investment bank and broker-dealer that provides investment …

Leave a Reply

Your email address will not be published.