The importance of automated document processing in lending

Intelligent digital lending solutions can help brokers and lenders overcome industry challenges to close more deals

The importance of automated document processing in lending

Loan Origination Challenges Today
Recent analyst reports suggest that loan origination accounts for 40% of total mortgage lending costs and that 70% of mortgage lenders are compromising sensitive financial information through risky sharing practices. Both lead to revenue loss and a poor borrower experience.

Automated loan processing and underwriting are not new concepts in the banking and financial services industry. In the mortgage industry, brokers and lenders struggle with a constant pressure to:

  • Reduce the average sales cycle
  • Increase pull through rates
  • Improve loan approval rates
  • Minimize loan fallout and abandonment rates
  • Lower the overall cost of acquisition.

In pursuit of these golden metrics, mortgage lenders have adopted solutions to digitize parts of the loan life cycle. However, not all digital solutions may seamlessly integrate into the loan document process. Some lack end-to-end automation and the cognitive capabilities to handle ambiguous credit information, causing them to end up differing a large chunk of cases to loan officers, which is ultimately ineffective and inefficient.

Additionally, mortgage brokers and loan officers have to chase customers for repetitive, time-consuming tasks. For example, brokers can spend a lot of time:

  • Filing applications
  • Gathering documents
  • Following-up and communicating with clients (often via unsecured email)
  • Reviewing submitted documents for fraud and accuracy.

All these challenges make the loan origination process lengthy, increase the opportunity cost, and reduce the number of quality loans sourced.

Mortgage Lending: Now Streamlined, Secured and Simplified
Mortgage brokers need trusted software tools to improve document handling process efficiency beyond what is possible with conventional software. Artificial Intelligence (AI) systems can help brokers intelligently classify and analyze data elements extracted from documents to provide a more accurate scorecard of a borrower’s loan application.

The insights generated by automated document processing (ADP) software can be used by brokers to accelerate loan document proofing and validation prior to submission to lenders. Another major bonus of ADP is that it identifies information inconsistencies that would raise fraud concerns by underwriters. These benefits significantly shorten the loan origination cycle.

Imagine a More Intelligent Mortgage Lending Process
The power of machine learning technology is no longer exclusive to enterprise corporations. This technology is now available on the cloud, including solutions designed for the mortgage industry in Canada. Kapti, the latest solution from Blanc Labs, helps brokers and lenders automate their document processing. 

Dariush Zomorrodi, chief innovation officer at Blanc Labs, emphasizes that the role of an ADP software is to empower mortgage brokers to focus on what they do best: selling.

“Machine learning technology has reached a very mature and affordable stage.” said Zomorrodi. “The more documents are processed by ADP systems, the more accurate they are. Automating document processing takes away repetitive and administrative work, enabling brokers to focus on closing the deal.”

Dariush Zomorrodi is moderating a roundtable at the CMP Broker Connect virtual event on August 20 on How to Speed Up the Loan Process. The roundtable will bring together a broker and a lender to discuss the loan process and how technology can simplify the process, enable more mortgage sales, and boost broker productivity.

Blanc Labs is a financial technology innovation company specializing in intelligent automation solutions for the lending industry.