Creating Opportunities for Lenders with Automated Workflow
By Olayemi Jemimah Aransiola
March 21, 2024

Lending involves documentation, verification, creditworthiness analysis, disbursement, and many other processes. These practices result in an enormous amount of paperwork, from origination to collection, which mostly consumes time while still inefficient.

This is why automation is now the buzzword in the financial industry. Lenders are curious to know how automation can streamline loan origination, increase the productivity of lending officers, and satisfy their customers.

Interestingly, the tide is decisively favoring workflow automation and digitization of the entire loan management process. This trend shows that resilient lenders who are willing to upscale will be a part of the future of lending. Rightfully, lenders should now more than ever consider phasing out legacy systems and investing in the right technology to establish dominance and improve their loan portfolios. 

In this article, we will discuss how workflow automation can create multiple and unending opportunities for lenders in the financial services industry.

What is Loan Automation?

Loan automation refers to processes that streamline all stages of a loan life cycle. From origination to risk assessment to decision-making, disbursement, and repayment control. Many loan management software now serves loan origination and other aspects of the loan cycle for both traditional and non-traditional lenders. These systems ensure that there is less paperwork to be filled, fewer human efforts required in the loan lifecycle, and fewer human errors.

Additionally, loan automation improves the efficiency of financial institutions’ practices by ensuring that the loan process is sped up and that borrowers can initiate their loan applications and get funding faster than they would have with the legacy system.

The food for thought is how, when swapped out for automated workflows, current lending processes can be amplified to reflect top-notch team efficiency and transparency.

How Does Automation Help in the Loan Origination Process?

Here’s a detailed look at how automation aids each stage, with examples to illustrate its impact:

1. Data Capturing and Verification

Automation tools, especially those utilizing Artificial Intelligence (AI), streamline the data-capturing process by automatically scanning and extracting data from loan application documents. With the help of a sound loan management system, lenders can digitize the application process by introducing custom application links that borrowers can apply with from the comfort of their homes. This reduces the need for manual data entry and minimizes errors. Verification processes also become more efficient as automated systems can cross-check the extracted data against other databases or documents for accuracy. For example, an AI-powered system such as Configure powered by Evolve Credit can scan a borrower’s bank statements and other relevant documents and extract information such as income levels, employment status, and recurring expenses. This data is then automatically verified against external databases or pre-set criteria to ensure its accuracy and completeness.

2. Credit Decisioning

Systems with automated loan decisioning capability use algorithms and predefined criteria to assess applicants’ creditworthiness. This speeds up decision-making and allows lenders to respond faster to loan applications. It also helps maintain consistency in decision-making and can improve risk management by applying uniform standards. Another fact about swift credit decisioning is that it can significantly affect loan recovery.

Imagine a bank using an automated decisioning platform that evaluates applicants based on credit scores, debt-to-income ratios, and other financial indicators. The system can instantly approve or reject applications based on these criteria or flag them for further review if they fall into a gray area.

3. Portfolio Monitoring and Reporting

Loan process automation provides continuous monitoring of loan portfolios, generating real-time reports on performance metrics such as payment history, delinquency rates, and overall portfolio health. With the insights provided, lenders can quickly identify and address potential issues. Say a lender decides to use an automated monitoring tool to track the payment performance of all loans in a portfolio. The automation will trigger an alert to the lender when a borrower misses a payment or when a loan’s risk profile changes due to external factors, such as a downturn in the borrower’s industry.

4. Compliance Checks

Compliance with regulatory requirements is another aspect of loan workflow that can be streamlined through automation. Automated systems can check loan applications against relevant regulations, such as AML (Anti-Money Laundering) and KYC (Know Your Customer) requirements, to ensure all loans comply with laws and regulations.

Before a lender processes a loan application, an automated system must verify the applicant’s identity, screen against watchlists, and check for any red flags in accordance with AML and KYC regulations, ensuring the lender remains compliant.

5. Loan Closing Review and Documentation

The final stages of loan origination, including the review of closing documents and the disbursement of funds, can be automated to ensure accuracy and timeliness. Automation can generate necessary legal documents, manage deadlines, and handle fund disbursements without manual intervention. Consider mortgage loans, for example; an automated system can prepare and send closing documents to borrowers for electronic signatures, schedule closing dates, and ensure all necessary documentation is completed and compliant before disbursing the loan amount.

What Are the Benefits of Loan Automation?

The inefficiency of legacy systems is a plague impacting lenders and their businesses in the financial industry. Legacy systems, as their name implies, lack improved technology that amplifies the financial institution’s services or the ability to go digital and improve customers’ experiences.

According to a report by McKinsey, “the average “time to decision” for small business and corporate lending is between three and five weeks.” In today’s world, this is becoming obsolete as borrowers work with speed. Lenders leading the financial institution space right now can do so because they have hacked the 24-hour decision-making time with the help of digital loan management systems equipped with automatic tools.

This translates to conducting an almost immediate creditworthiness analysis and completing the identity verification process by leveraging Robotic Process Automation (RPA). Here are the benefits of automating your processes:

The Benefits of Loan Automation

  1. Efficient Loan Processing: Loan automation systems expedite the loan process, making it faster and more efficient. This efficiency is achieved by automating various stages of the loan cycle, including application, origination, approval, and servicing. As a result, financial institutions can process more loans in less time, leading to increased productivity.
  2. Accuracy: The systems employed for loan automation can decrease human error by up to 90%, improving decision-making accuracy. By automating tasks that don’t require human intervention, such as comparing application data to preset credit, debt, and income parameters, loan automation systems can significantly reduce the risk of errors.
  3. Superior Customer Experience: Automation can enhance the customer experience by providing swift responses and personalized service. As digital natives accustomed to immediate gratification, modern borrowers appreciate the ability to apply for loans online and receive quick responses.
  4. Paperless Process: Automation eliminates the need for paper documents, making the process more eco-friendly. Digital applications are not only more convenient for borrowers, but they also reduce the data-entry burdens associated with paper ones.
  5. Data Exchange: Loan automation systems often include APIs for data exchanges, facilitating seamless communication between different software. This feature allows lenders to streamline disparate systems and provides reliable and consistent data flow at any stage of the loan origination process3.
  6. Analytics: These systems often include analytics capabilities, enabling continuous process improvement. Financial institutions can identify areas for improvement and make informed decisions by analyzing the data collected during the loan process.
  7. Revenue Increase: Loan automation can boost revenue by helping close more loans in less time. This increase in revenue is a direct result of the improved efficiencies and productivity gains achieved through loan automation.
  8. Fraud Detection: AI-powered fraud detection systems provide real-time monitoring capabilities, allowing lenders to identify and respond to potential fraud as it occurs
  9. Regulatory Compliance: Automation tools simplify compliance procedures by automatically checking loan applications against various regulatory requirements, such as anti-money laundering (AML) and know-your-customer (KYC) rules.


As the loan market grows, financial institutions that leverage loan automation will likely have a competitive advantage. Forward-thinking lenders that have digitalized their processes can attest to how evident the rewards of automation are, and for lenders standing on the digital doorstep, hesitant to cross the threshold, it is time to accept that the financial institution’s future is automated. Discover the easy, peasy ways to get started with Configure. Configure is a leading loan management system that solves all workflow automation issues for lenders. Book a Demo

By Olayemi Jemimah Aransiola
March 21, 2024
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