Lending can be a highly profitable business but, as an industry, it's been historically slow to evolve and adopt new technologies. However, given the competition banks face from fintech companies, changing consumer wants and needs, and a still-recovering but tightening job market, it is time for traditional financial institutions to accelerate their digital strategies and move toward full digital maturity.
(Measure your digital maturity progress with our free checklist.)
Here's a look at how automation can help give banks back their edge in the loan origination game.
Automation slashes manual tasks
For one large international bank that recently approached Ripcord for help in improving its processes, the name of the game is still, arduously, paper -- and huge amounts of it.
Lending is still "all processed on paper today," Mark Carter, an enterprise account executive in the Northeast for Ripcord, said. "The industry is starting to change, but it's changing slowly." The bank that came to Ripcord uses approximately 150 million pages annually, Carter said. In processing loans for loan origination companies, this institution must take reams of paper-based information, scan, digitize, and extract the data from it, and then send it back to that third-party business.
With so much paper, using Ripcord solutions to automate the removal and exact replacement of what could easily be hundreds of staples, as well as the removal and replacement of myriad, specific files from their myriad, specific file folders, can save employees hours upon hours of rote, manual work each month.
The bank has "a whole team that preps documents," Carter said. "That's the traditional process. So you've got a lot of people on the front end and a lot of people on the back end. ...it's pure labor."
Automation speeds up processes
Once the third-party information comes into the bank, it behooves the bank's team to scan, extract, and digitize the information quickly.
"The faster you process that, the faster the money flows back to the bank, and the faster that money is available for lending again, so that the bank can make more money," Carter said.
Automating the "prep and re-prep" of incoming documentation means the process of extracting data is speeded considerably, getting the loan back out for servicing and processing much sooner than the bank's team would have been able to do otherwise.
(Learn how to unleash the power of your data today.) Speed is, increasingly, part and parcel of the overall positive consumer experience consumers want and expect from companies.
"Competing on only products and services is no longer enough," reads the Cognizant white paper The Path Ahead for Mortgage Digitization. "How a company delivers on its experience is becoming more important than what it delivers. ... A focus on customer experience improves customer satisfaction, customer retention, brand value and, ultimately, sales."
Automation increases accuracy
Modern document management systems with machine learning and integration capabilities like Ripcord can greatly increase accuracy, all while integrating seamlessly with specialist software and data management systems financial institutions already have in place.
"The key benefit is extracting the right metadata elements from those loan documents to drive whatever process" is being done," Carter said. "In mortgage processing, it's about the notes, the name, the loan number, the amounts, the percentages. All the data elements ... inside the document can be lifted to help drive the process."
Because Ripcord automation is compatible with in-place software "we can save on companies money on people, labor, and hardware costs," Carter said.
We're on a mission: to digitize the world, one industry at a time. Using vision-guided robots, AI and machine learning, we digitize, enrich, and organize a company's most important paper documents, no matter what the volume. Get more information about Ripcord today.