Five Tips for Building the Best Loan Origination Process

The lending industry is rapidly evolving, making it essential to deliver loans to customers in just minutes or even hours. However, embracing digital and data-driven strategies without considering risks is equally important. Most lenders need to implement digital lending solutions quickly and responsibly and for this they often turn to BankPoint.

Transitioning from your current model to a tech-driven, seamless, and secure lending experience is challenging. Having worked on numerous projects with organizations worldwide, we understand that the biggest obstacle to success isn’t a lack of understanding of technology’s benefits or the complexity it may introduce—it’s fear.

While the learning curve can be steep, we’ve gained the expertise to handle everything from coding challenges to crises of confidence. If you’re ready to transform the way you onboard borrowers and manage lending, you’re in the right place.

Focus on the user’s application and onboarding experience

A successful lending model centers on the customer, a need that has become even more crucial during the pandemic. While many governments have relaxed pre-loan checks, this has introduced a new challenge—an increased risk of fraud. This issue can make digitizing the lending process seem less attractive. However, it is possible to manage this risk effectively by adopting a tech-driven lending system that speeds up approval without compromising on the necessary scrutiny.

Before overhauling your lending approach, consider what your customers truly need. Engage with them to understand their preferences and challenges with the current process. Inquire about their concerns and you might find that minor adjustments to technology and processes can significantly address their needs.

Using technology doesn’t make interactions more impersonal; in fact, it can free up time to be more insightful and personable. To achieve this, map out the entire customer journey—from initial contact to repayment and beyond—and use this insight to rethink and improve your lending delivery.

Rely on Your Relationship Managers

Transitioning to digital lending is challenging across all cultures, and it’s crucial not to alienate your talent. Successful loan origination transformation begins by automating simple tasks to allow relationship managers to focus on complex or exceptional applications. Digitalization doesn’t make staff obsolete; it enables them to work more efficiently and cross-sell more effectively. Engaging them from the outset is essential.

Addressing unease and gaining your relationship managers’ trust is key. Involving them early in the transformation process, valuing their feedback, and demonstrating that their roles are being enhanced rather than replaced will help in gaining their support.

Cross the Divide and Remove Silos Forever

Creating a top-tier digital loan origination process requires collaboration among key teams, such as credit and underwriting. This collaboration ensures that customer needs are balanced with business revenue objectives and the bank’s overall risk appetite. A blended team approach allows for rapid iteration, testing, and builds confidence across all functions within the organization.

Know the Way and Show the Way

The shift to digital lending is complex, as loan origination impacts every part of the business, often without a single point of ownership or oversight. Strong leadership is essential to coordinate front office, IT, risk, and operations to create a seamless process. Removing organizational silos and addressing any resulting tensions is crucial. A leader who can prioritize resources, ask tough questions, and continuously advocate for digitization is vital for successful transformation and its ongoing impact.

Change management involves significant effort, best achieved when led from the top. Leaving transformation to system operators alone often results in merely replicating existing systems. Strategic and functional implementation is necessary for effective change.