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How to Automate Your Lending Process

If you’re still approaching lending from a largely manual process, it’s time to usher your business into the 21st century and embrace automation. While it can definitely be scary to make the shift, it’s a necessary one in the evolution of your business.

Automate your lending process
Pixabay.com image adapted by Market Business News.

The Power of Automation in Lending

You are only as strong as your weakest link. This is as true in every area of life, including your personal life and your business. 

Think about it like a runner training for his first marathon. That runner trains for months to get his body in peak condition so that he’s ready for race day. This includes building up physical stamina, strengthening his leg muscles, and even working on his mental fortitude and endurance to stay focused during the final stretch. He might even run some half marathons and other races to get used to the race day experience. The runner listens to podcasts, reads books, watches YouTube videos, and chats with other friends who have run dozens of marathons in the past. By all intents and purposes, he’s prepared. 

But then, just a day before the race, he jams one of his toes while playing soccer with his son in the backyard. And despite being such a minuscule part of his body, the excruciating pain keeps him from running the race. The rest of his mind and body are totally prepared for the race, but the runner is only as strong as his weakest link. Therefore, he’s forced to sit home on race day.

The same is true in business – and specifically with your lending process. You can have 99 percent of your process nailed down, but you’re only as strong as your weakest link. If just one percent is misaligned, the rest can come crashing down.

While every lender and organization is unique, there tends to be one weak link that’s consistent across the board: people. This isn’t a knock on your team as individuals or even a negative strike against their skills, capabilities, or character. It’s just reality. Human error will always represent the weakest link in your process. And until you embrace automation, it will hold you back from running your race – i.e. serving clients well.

3 Automation Tips and Techniques

Automation might sound like a buzzword that gets casually tossed around in the industry, but it’s a very tangible investment that must be taken seriously. Here are several tips to help you get the most out of automation:

  • Choose the Right Loan Origination Software

If you want to do automation the right way, you can’t take any shortcuts. In other words, you can’t only automate certain stages of the process and then manually deal with the rest. There should be automation throughout the entire process. This includes loan origination, risk evaluation, credit decisions, underwriting, collateral management, debt collection, loan servicing, reporting, supervision, and even regulatory compliance.

Not every tool will do all of these things. This is why it’s so important to choose comprehensive loan origination software that oversees all aspects from start to finish. A failure to do so could leave vulnerable gaps in your overall process. 

  • Reengineer Your Processes

You already have certain processes in place. When you implement new software, you’re forced to reengineer your processes for the better.

Take time to carefully evaluate your processes and get clear on how this new software changes things. Certain steps can now be eliminated, while others will be streamlined via automation. This allows you to reallocate man-hours and other resources accordingly. 

  • Train Your Team

The worst thing that can happen is that you spend money investing in loan origination software and then fail to take advantage of the key features and benefits. 

Take time to train your team on how to use this software so that you extract maximum value. It might feel like a huge commitment on the front end, but your dedication to thorough training now will benefit your organization for years to come. 

Adding it All Up

Automation is a game-changer. Not only does it eliminate human error (the greatest threat to your security and accuracy), but it also streamlines processes and leads to greater efficiency. The end result is an ability to serve your clients better and increase your company’s profit margins and revenues.


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