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Work has changed. But has it changed enough? For some, dramatic retooling has provided significant benefits. For others, it simply has mimicked traditional processes in a digital model, producing a “garbage in, garbage out” situation. Leading lenders have not only survived but thrived and part of the winning combination has been aligning digital evolution to business priorities.
In the feast or famine of volatility, lenders have generally feasted and the challenge has been a delicate balance of capturing opportunity without sacrificing employee wellness or customer satisfaction. By automating the time-consuming process of document collection, innovative lenders have been able to capitalize on increased opportunities, easing the workload for existing staff and reducing the need to hire new staff during uncertain business conditions.
20th Century Technology for a 21st Century Challenge
Lenders using 20th century tools like email, spreadsheets and Customer Relationship Management (CRM) suites have found that they are proving inadequate in meeting modern workplace demands. In the lending application process, a large volume of documents needs to be collected for the transaction to move forward. Outdated systems relying on many manual steps negatively impacts the ability to accelerate loan close times.
Downstream, this affects bigger business issues including time to revenue, quality customer experience and the visibility businesses need to make forecasts for critical decision-making. What may be worse, is the risk that is compounding in those inboxes: personal information that is not being managed in compliance with privacy laws.
Luckily, tools that provide speed, efficacy, process automation, and data integration are already available to transform new work processes. Industry experts estimate that hyper automation is occurring in the majority of financial services businesses. Yet many are not able to reap the benefits, due to disjointed, siloed and costly systems.
Manage Higher Loan Volumes by Breaking Processes Down
To realize the benefits of automation, lenders like Nucleus Capital’s 7a Funding are looking across the tasks their teams do every day to identify and streamline time-consuming manual tasks. Using technology to compress the cycle of lending applications and approvals and run parts of the process simultaneously, 7a Funding has been able to dramatically increase the number of loans processed per person. The organization has also reduced the amount of time to close applications, and improve the experience for banks and lenders, making them more likely to choose to work with them in the future.
Tony Brevard, principal and CEO of Atlanta-based Nucleus Capital says “I’ve learned that automation isn’t just for the big banks or the startup techies. Our business was growing so fast that we just couldn’t handle the volume. We looked for automation to solve a particular part of our business workflow — document collection — and have been able to increase the volume of business we handle by nine times.”
Brevard has shared his story and how he’s been able to accelerate his business using automated document collection in a video available at this link.
Critical Success Factors
While many lenders have invested in digitization, industry analysts indicate that most are early in their journey. Learning from early adopters can help lenders avoid mistakes and accelerate their own initiatives. Critical success factors include:
- Focus on areas that are core to execution, such as being able to meet increased demand, to make a bigger impact. Immediate cost savings are great, but in times of high demand, being able to scale revenue or profit margins will have lasting effects.
- Select tools that won’t be taxing on people to learn, or IT to implement. Setup, onboarding and ongoing customer success as well as intuitive interfaces will increase usage and accelerate ROI.
- Look for tools that integrate and extend existing systems to orchestrate improvement across multiple functions. Integration is essential. Data and process siloes contribute to business complexity. Investing in applications and services that provide packaged integration process capabilities, open APIs and can support integration with professional services will lighten the load for IT and speed implementation timelines.
- Prioritize initiatives that help you gain visibility across your deal pipeline. In times of uncertainty and low volume, seeing what stage each deal is at is crucial.
- Automation is unavoidable, but doing it wrong can set you back. SaaS solutions are constantly adding new features, better security and more flexible deployment options. On the other hand, configuring legacy systems can cost more to run, are longer to deploy and are often harder to change when new information or business priorities come to light.
Quick Innovation to Meet Business Demands
As lenders’ needs evolve, they have the opportunity to create business advantage in the tools and processes they choose to digitize and automate. Being able to innovate quickly and adapt to changing consumer demands means assembling capabilities that deliver a fast route to business objectives: revenue, efficiency and effectiveness. To do this, lenders should consider standardizing, simplifying and automating repetitive processes such as document collection for loan applications that free up employee time to focus on more strategic elements of business.
