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Did you know the practice of consumer credit and lending began over 5,000 years ago? Processes have certainly changed since ancient civilizations first developed early laws around credit and lending. Over hundreds of centuries, we have continuously improved upon those foundational laws and regulations to create the most modern solutions to assessing risk, analyzing data, reaching decisions, and maintaining a loan from application to final payment.

The combination of new laws, updated practices, and technologically advanced solutions surrounding finance and lending has created the most efficient and accurate processes for loan origination and management yet.

However, even though consumer lending has improved drastically since the time of ancient lenders and borrowers, today’s lenders still face challenges as they work to serve their teams and customers.

Today’s Lending Challenges and Solutions

Some of the most common challenges lenders and lending companies face today are rooted in speed, convenience, and accuracy.

Challenge #1: Speed and Efficiency

The customer experience has changed significantly, especially in the past few decades or so. Instant gratification is a driving factor in nearly everything, including the lending process. Loan origination used to take days or even weeks, and that was considered normal.

The solution to the Challenge: Automation

But now, with today’s advancements in automated loan origination software, many lenders are able to minimize wait times between the application phase and the decisioning phase. Decisions can be made within the day or a few days, depending on the type of loan and the capabilities of the LOS that the lender is using.

Faster decisioning leads to several benefits, including:

  • Less hands-on attention per loan required
  • More time for your team to onboard more borrowers or tend to other crucial operations
  • More satisfied borrowers
  • Increases in returning borrowers or referrals from existing borrowers

Challenge #2: Convenience

Directly related to the challenge of speed in the lending process is the challenge of improving convenience. As mentioned, customers do not like to wait for their application to be processed or for a decision to be reached. In many cases, if another lending company is able to offer faster decisioning, customers are likely to choose the speedier option for the convenience of it.

An additional issue with convenience relates to the application itself. Some lenders are only able to offer an application to a borrower if they visit in person and fill it out right there. However, people enjoy (and expect) the convenience of applying for their loans at home or from anywhere they have internet access. Online loan applications are hugely beneficial when it comes to convenience for the borrower.

The solution to the Challenge: Automation

We’ve already discussed how loan origination software with automation delivers a speedier application and decisioning process, which enhances the customer’s sense of convenience.

However, the right automation solutions also allow you to take your application online. Doing so provides a convenient way for borrowers to apply for the loans you offer right from their desktop, laptop, tablet, or smartphone.

(Allied Business Systems customers can now utilize an absVision-friendly online application form so that their borrowers may apply from anywhere with an internet-connected device. Ask us how today!)

Challenge #3: Inaccuracies, Errors, or Violations in the Process

Human error is a natural part of life. No one is perfect, including loan officers, and there are several areas within the loan origination process where errors can negatively affect outcomes. This is especially true for manual loan origination and management.

Certain actions made in error can result in anything from a miscalculation to an unintentional violation of regulatory requirements.

The solution to the Challenge: Automation

When it comes to accuracy in the lending process, an automated loan origination software helps loan officers remain accurate with their calculations, next steps, and additional actions that are susceptible to mistakes and errors.

Additionally, remaining accurate and in compliance with the rules and regulations that apply to lenders is inherently tricky, especially since regulatory laws are constantly being updated or revised. However, high-quality loan origination software that is consistently updated to match the changes helps lenders stay compliant and less at risk of experiencing a violation.

absVision Is Your Automated Loan Origination Software Solution!

absVision is a robust LOS that is simple to use and fully automated to improve the lending experience for your team and the borrowing experience for your customers. From data entry and decisioning to loan management and closing, absVision ensures speed, convenience, accuracy, and so much more. Streamline your lending workflow and improve the experience for all involved when you choose absVision for your consumer lending solutions!

Learn about all the ways absVision can benefit you and your team by speaking with an ABS expert today: 800-727-7534

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