Commercial mortgages and real estate loans are some of the most complicated and expensive types of commercial loans. Since commercial loans are high-value and low-volume, the process of getting a commercial loan from a bank involves many steps and channels. In a manual commercial loan origination system, there are many stakeholders, such as product teams, treasury departments, credit committees, etc., who each need to validate the loan before the final approval.
The paper-based, manual loan origination process can be hard and time-consuming at times because it is an old way to do things in a world where everything is digital. When a loan is started by hand, there is a big chance that the data will be misread or that someone will make a mistake.
Due to the many problems with making loans by hand, banks and other financial institutions now have commercial loan origination software. The automated loan origination software makes it possible for banks to do straight-through processing in their real estate loan origination software, which makes the customer experience better for their customers. Adding automation to the process of getting a loan has greatly improved the quality of decisions, which has led to more money being made.
Benefits of Using Commercial Loan Origination Software
Scalability is one of the most important reasons for the growth of the lending business. In addition to security, openness, and low costs, financial institutions will be able to add features to the cloud platform. This can help meet the needs for the number of loans without requiring a big investment or more IT resources.
The cloud also gets rid of disaster recovery, infrastructure maintenance, upgrades, and backups that aren’t needed. This reduces the need for IT support and costs. In short, the cloud makes the LOS scalable by putting the focus on improving innovation, customer experience, and productivity.
2. Document Management:
Starting a business loan requires a lot of paperwork and documentation, which can be difficult to do by hand. To manage documents well, you need to have strong skills in document management. So, using loan origination software is a great way to handle the paperwork digitally and make the customer experience better. Also, it frees up the relationship managers to work on more important tasks instead of doing things by hand.
3. Customer Management:
The customer experience can be significantly enhanced by managing the entire customer lifecycle in a unified automated loan origination software. The loan origination software offers effective customer relationship management(CRM) solutions that keep track of everything from customer onboarding to the final loan application approval. This helps streamline all the credit origination solutions, such as the loan underwriting process, making them seem less efficient.
4. Exceptions Management:
Automation has made the process of getting a commercial loan much faster and easier. But the sudden switch from hand-done tasks to automated ones put the relationship with the customer at risk. Some of the bank’s regular customers may not follow the credit policies, but they are still valuable to the bank. In these situations, exceptions can be made during the approval process with the help of automated risk management software. This lets the banks get to know their customers better and reduces the chance that they’ll lose a good one because of new business opportunities.
In The Bottom Line
Even though some businesses might have trouble getting started with commercial loan origination software, it can be good for them in the long run. It is important for financial institutions to use automated software to make them more efficient and help them make better decisions. Find the right commercial loan origination software for your business goals.