Technology is made with an objective to serve society. In other words, to help people linked to time & effort in manual tasks. The development of an automated underwriting system has helped credit unions and banks to an enormous extent. There was a time when people were dependent on the traditional banking system and consumed a lot of time to process the loan. Now the lending decision is done by automation software and meeting the lenders’ & consumers’ needs. The system uses artificial intelligence & advanced technology to support a faster & effective underwriting process.
What is Automated Underwriting?
The earlier lending industry is now moving towards automated credit underwriting as it reduces a great time of the potential borrowers. Thus, it leads to high customer satisfaction. One can track the growth to know the implementation of automated underwriting software. In 2017, the market expected a rise of software investment over USD 5000 million till 2024. It doesn’t matter the size of the financial institution; the software fits perfectly everywhere & anywhere. In addition, ones who are targeting the corporate loan market want a robust & updated loan origination software to run successfully over other competitors.
The Benefits of Automated Credit Underwriting
The automated credit software results in a win-win situation for both the borrowers & lenders. As discussed, it saves time for both parties. It allows quick decisions by analyzing the credibility of the borrower. The productivity is not only based on the time factor but also includes the accuracy of the data. The system does the analysis, storing, uploading, and other tasks without errors which also lead to productivity.
➤Better Decision Making
The system is well designed by the developers (and many IT brains), which is free of clerical mistakes. Humans can still make mistakes, but the mistake hardly makes them as they are based on the defined programs which run them accurately. This helps the banks & credit unions to make better decisions and not to lose potential borrowers.
➤Smarter Fraud Detection
A significant risk a commercial loan underwriter goes through every day. Especially when there was no involvement of high-tech underwriting software. All the work was done by underwriters which ended up with errors. This gives a chance to the fake borrowers to perform fraudulent practices. Therefore banks get impacted with financial losses and attain bad repo. With the help of software, red flags are easily detected and make the loan process seamless.
➤Delight Customer Experience
Automated documentation makes the process run faster. This gives the customers a good experience as they don’t need to wait for a number of days to make the first phase of the loan process complete. Plus, the satisfaction boosts them to recommend others to go for the loans from a particular bank.
➤Consistency in Underwriting
Thanks to the automation as it increases the banks to maintain the consistency of the speed and fewer errors. Undoubtedly, with the invention of modern software, the shortcomings of banks & credit unions are reduced.
In today’s era, the traditional lending system is replaced with the revolutionized credit underwriting process. Underwriting automation has made life easy for bankers and borrowers. Therefore lead to an effective banking system overall.