An integrated lending and credit system can help overcome many roadblocks to a streamlined lending program. Below is a shortlist of the most important features you should look for in researching lending and credit software.
1. Improving transparency into business development.
Lenders track outstanding opportunities and sales activities in spreadsheets, calendars, and notebooks at most institutions. However, it’s challenging for management to measure progress or build predictable forecasts without a centralized system.
With an integrated solution, customer information from the core gives lenders a contact database to work with and creates a centralized place for logging conversations. The added transparency of an integrated relationship system means the institution can provide better service to customers, and management has a means by which it can hold lenders accountable for progress toward activity goals.
2. Optimizing the loan origination process.
For many financial institutions, the process of taking a loan from application to closing can take months. It involves numerous bank employees, including business development officers, analysts, credit committee members, loan administrators and outside closing agents. As the prospective loan advances from stage to stage, bottlenecks are common:
- Back and forth with the borrower for required financial documents
- Unbalanced credit analyst workload
- Unresponsive third parties
- Unclear loan-decisioning rules that require added discussion
- Delay as the credit file is passed between parties
- Hunting down the credit file when the bank must report to the borrower on progress
Absent a systematic and comprehensive way of defining and tracking the process, management is forced to rely on anecdotal information about the status of a credit request. But visibility into a process enables management to see the status of loan request tasks and have an audit trail to track what has been completed and by whom, leading to improved pipeline management and better forecasting.