How to Improve Loan Processing and Decisioning in Your Organization

There’s a lot to the process of originating a loan, and in most cases, there’s a lot to the business itself. Everything from the applications to the processing of actual loans for customers is a facet of one bigger process, and many times, the business encompasses this process with each facet in kind. So, it stands to reason that the more you can use modern tools to help your cause, the better your business can stand out by delivering its comprehensive lending services more quickly and more consistently than your competitors. To achieve such competitive lending capability, your organization needs to be poised for quality: it needs to reach decisions and process loans faster and more efficiently than the rest of the lending services out there. How can you accomplish this, though? Well, one robust way is by automating your processes.

Application Processing, Paper-Free

The application process in and of itself is grueling and often takes far too long. However, one thing that has become more commonplace is the use of digital forms to intake the information required from each applicant, rather than relying on “pen and paper” applications. Not only is this paper-free, making loan applications easier on the environment and quicker to submit, but the way that these digital forms are laid out often becomes far more helpful for applicants than the old-fashioned applications. With smartly placed questions and a chance to offer elaboration online, the application process has become less of a chaotic mess already.

Of course, there are other processing elements that eliminate paper and make it easier to electronically communicate: from the implementation of acknowledgment emails to the electronic signatures required at the end of the loan application process, there are numerous places where old-hat methods of communication have fallen by the wayside (or will fall by the wayside) to make room for the digital communications and interactions that help move everything along all the more quickly.

While application processing alone may have taken weeks before, there’s no need for that lengthy time frame thanks to online submissions and other advancements in the field of finance. Now, lenders are capable of providing answers to applications within days, or sometimes even within 24 hours, making loan applications a more attractive prospect to lending customers than ever before.

Underwriting and AI-Driven Risk Analysis

The decisioning activity within a lending workflow is one that incorporates various other steps, including underwriting. Underwriting, when digitally executed, involves the online research of credit score criteria and an aggregation of those criteria (met and unmet alike) for the applicant in question. This is an increasingly automated step in the process, as various lenders already have criteria and a scoring system set up to calculate a rough score based on the application information alone. When using automation in financial services, of course, there is a need to implement some human supervision, so this rough score often gets evaluated in the decisioning stage by a loan officer. In rare cases, though, you may have set up specific loan types to approve automatically based on certain criteria without validation from a loan officer.

The use of risk analysis is another thing that plays into the overall decisioning process itself. Risk analysis isn’t always automated, but an automated risk evaluation can provide insights to a decision-maker just the same way that a traditional risk analysis would. However, risk evaluations by AI use machine learning and deep neural networks to inform decisions — sometimes more intimately and more appropriately than would be possible by human analysts alone.

When underwriting and risk analysis come together, we get to the point where either a loan officer or a program (depending on your workflow) decides to approve or deny the loan request. In the case of an actual approval, those electronic signatures are one thing that automated lending has implemented, and there’s also an offer that needs to be extended in the first place. Again, this type of tedium can be automated easily, making face to face interactions much less important in order to receive a loan directly.

Reducing Cost of Operation

The deployment of certain elements like automated underwriting or digital forms have helped to make the process of loan application and origination speedier than ever. In the same vein, it’s created an easy and official way for people to apply for loans remotely, without having to come into contact with others face to face. However, a more significant boon to the loan origination workflow is the reduction of operational costs. From the amount of time it takes to underwrite a loan to the amount of human labor being reduced in the use of automated communications, there’s a great dip in the amount that lenders have to spend in order to get the business they want — and for customers to get the loans they need.


There are numerous ways to improve loan processing and decisioning within a lender’s workflow through automation alone. The use of workflow automation to improve these common steps in the process makes for a strong use case of what automation is capable of. With financial services, the use of a human intermediary to guide the process is almost always necessary, but the level of automation that’s in place for many lenders now is impressive. By automating lending processes more regularly and confidently, your organization can make a lot of headway in the competitive lending market.

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