To avoid creating a poor customer experience and a decrease in profitability for small business loans, lenders need to ensure that they are providing an end-to-end digital experience for not only their customers, but also for their employees. Over the last two years, lenders have adopted new technology to enable small business borrowers to easily apply for loans online through an end-to-end digital experience; however some financial institutions have yet to innovate their back office processes, more specifically, their underwriting processes.
A worthwhile investment for all financial institutions is to provide their lenders with the same seamless experience for underwriting the loans, to avoid a disjointed process that affects the experience for the borrower.
Lenders that are using legacy processes spend at least four times longer to underwrite a small business loan than those that are leveraging technology solutions. This leads to a decrease in the amount of loans that can be processed and an increase in the amount of resources that need to be dedicated to each loan. It also affects the customer journey by delaying the amount of time it takes for a borrower to receive loan funding.
Increasing Efficiency in the Underwriting Process for Small Business Loans
Legacy underwriting is inefficient, prone to error, and creates a bad experience for both the lender and the borrower. The majority of time in the loan origination process is tied up in underwriting, so banks and credit unions should be consistently seeking ways to shorten it and make it more efficient, because the longer it takes to underwrite a loan means less loans processed by the lender.
If an institution wishes to expand its business lending portfolio without implementing an end-to-end digital process, there is no other way to achieve that goal and efficiently scale their small business segment without hiring more employees. The more that business segment develops, the bigger of a bottleneck underwriting will become.
To avoid losing customers to competitors that can provide loan approvals faster, financial institutions must find a solution to this urgent need in the process.
Creating an End-to-End Experience for the Entire Loan Origination Process
In order to create a loan origination experience that is entirely end-to-end, lenders should turn to technology partners that can digitize and simplify legacy processes.
Financial institutions leveraging Numerated’s digital underwriting solution can dynamically underwrite small business loans with the following features:
- Spreading Automation Numerated’s market-leading automated spreading capabilities enable lenders to efficiently spread complex financial statements within minutes, maintaining 100 percent accuracy from scanned, unstructured documents, every time.
- Financial Analysis Lenders can easily and effectively analyze spreads generated by the platform using Numerated’s flexible pro-forma modeling and global cash flow solutions.
- Bank-Controlled Decisioning Automation With Numerated’s automation capabilities, lenders can leverage data to automate credit decisioning, while still maintaining the ability to incorporate manual oversight and adjustments to uphold their credit policy.
- Highly Flexible Credit Memos Numerated’s new Credit Memo capabilities allow lenders to automatically populate their existing credit memo templates, directly in the platform.
Implementing a solution like Numerated will enable bank employees to underwrite loans up to 90 percent faster than legacy processes, so they can focus on building relationships with customers and further developing their small business segment.
Learn more about how you can provide your employees with an end-to-end back office solution using Numerated by registering for our upcoming webinar on Tuesday, Oct. 4, at 3pm ET.
