Thanks to COVID-19, the race to digitalise the loan application process is well and truly underway, yet according to Urvesh Vibhakar, about 70% of second and third tier lenders haven’t crossed the finish line yet.
MPA spoke with the solutions delivery manager of Loanworks to find out how the company’s origination platform is streamlining the application process and making long turnaround times a thing of the past.
An automated solution
Throughout the pandemic, longer loan processing times have meant that in many cases brokers have needed to prioritise loan products based on whether or not a lender can offer approval within the timeframe of the customer.
According to Vibhakar, the last three months have seen increased interest in Loanworks Origination; a platform that provides an automated solution for lenders.
“The origination system handles all that back-office process, all the way from submission to approval, through to the settlement.”
Fully integrated with different aggregator CRMs, the platform allows the lender to give conditional approval within minutes of receiving the application. This then offers the potential for a lender to give unconditional approval (depending on the property, valuation type and lender) in as little as a couple of days.
How does it work?
When a broker clicks the apply button through their CRM, the application and supporting documents are converted in XML and become available in Loanworks Origination in real time.
“As soon as they click submit, the Loanworks Origination system won’t just receive that application data, it also has a programmed process to run certain actions, such as serviceability or credit decisioning.”
“So as soon as the application is received from these CRM platforms, the system initiates the process of credit serviceability.”
“Brokers will know in minutes whether an application has failed on serviceability or on certain rules.”
According to Vibhakar, about 20% of second and third tier ADIs have already converted to a digital loan application process, with more than 70% wanting to do so.
“With COVID, I think what everyone learned is that you really need to automate your processes as much as possible so that when something like a pandemic occurs, you will have more control over your processes.”
“We’ve been getting a lot of requests and interest from those second and third tier banks, ADIs and FIs about converting them into the digital process.”
A digital future in lending
He says automation and digitalisation is the way forward for the industry.
“Every lender is taking this journey.”
“Everyone knows that there is big potential for digitising; for converting that journey to a more automated straight through processing.”
As more and more lenders convert their application processes to an automated system, brokers are set to benefit from quicker turnaround times and a streamlined customer experience.
“What we are proposing with Loanworks Origination is allowing the lender to go back to the broker within minutes or hours and say here’s conditional approval in your hands.”
“That’s a big win for brokers; to have that confidence and to have that quick answer from the lenders that are using this platform, rather than waiting for days and weeks.”