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Unlock New Value from Lending Operations

Updated: Jul 1, 2021

Unlock New Value from Lending Operations: 6 Reasons Why Digital Loan Origination Holds the Key to Lasting Success

If your organization still relies on paper-driven lending processes, you’re missing out on opportunities to cut costs, boost efficiency, and tap into new markets. Read on to discover the top reasons why you can’t afford to delay making the move to digital loan origination.

Loan origination has long been a complex, highly manual process. It typically involves piles of paperwork, in-person visits, and rigorous checks that cost financial providers serious time, money, and effort. But this lending landscape is changing fast: Borrowers increasingly expect fast, friction-free digital experiences and disruptive players are entering the market, ready to deliver on those demands.

Organizations must adapt if they want to stay relevant—making lending faster, easier, and more accessible. And that transformation starts with digital loan origination. Digitization brings a huge opportunity to boost throughput, transparency, and efficiency, all while offering customers a more streamlined and satisfying experience. If your organization is still on the fence about digitizing lending operations, here are five reasons why it’s worth making the leap.

1. Reach new target groups

Embracing digital channels allows lenders to deliver differentiated lending experience - wherever their customers are. With the ability to apply for loans digitally, borrowers no longer need to visit branches in person and financial institutions no longer need a large physical presence in the regions they serve. This makes expansion into new markets much more cost-effective. What’s more, digitization helps lenders appeal to new target groups that are used to the speed and convenience of digital channels—creating valuable opportunities to grow the customer base and lift revenues.

2. Cut operating costs

Digital loan origination can drive significant value for lenders through increased efficiencies and lower operating costs. Reducing reliance on paper-based processes (or eliminating them entirely) drives down onboarding costs. Automated operations allow more loans to be processed with far fewer resources, for further savings. Platforms like MoneyPhone’s Digital Loan Origination Solution that include loan management portal and management dashboards, can drive more intelligent decision making that helps reduce underwriting costs.

3. Reduce interest rates

An added benefit of improved operational efficiency is the ability to offer credit at more competitive rates. By driving down the cost of processing and servicing loans through digitization, organizations can pass these savings on to their customers in the form of lower interest rates. In turn, this helps lenders stand out from competitors and win more customers, driving business growth.

4. Scale faster

Digitization also makes it possible for financial institutions to scale up lending operations quickly and cost-effectively. Freed from complex and time-consuming manual processes, loan officers can manage a higher volume of work with greater speed and accuracy. As a result, organizations can grow their loan book without added resources—supporting efficient expansion.

5. Redefine the customer experience

When financial institutions digitize loan origination, they are able to provide a far superior experience to borrowers. By digitally integrating and connecting the process, lenders can to serve customers in a faster, more transparent, and convenient way. This will set them apart from their competitors, helping them to build more durable and trusted customer relationships, increase their market share, and grow their business over the long term.

6. Improve turnaround times

With digitized loan origination, it’s possible for organizations to service loans much faster than with a manual, paper-based approach. Instead of going to a branch, filling out paperwork, and then waiting for days, borrowers can apply for a loan in minutes via a self-service portal on the lender’s website, or by working with a field officer to complete an online application. Loan officers can then use an online workflow to review and process the application, and manage disbursements and repayments digitally. It makes for a much smoother, faster process from start to finish.

Please click the link below to view a demo of MoneyPhone’s Digital Loan Origination Solution:


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