Loan origination for business clients is a long-haul procedure and is both time and labor-intensive. Document extraction and processing needed during loan approvals can burn many productive hours when handled manually. In addition, this approach deters banks and financial institutions from focusing on other value-added business areas.
Since the major bottlenecks arise during loan processing, cutting corners to save time is a recipe for disaster. Let’s dig deeper to understand the core areas of concern.
Most banks and financial institutions lack centralized Intelligent Document Processing software. Hence, manual loan processing and client communications can become a major concern for many reasons; a few of which are described below:
Document processing for business loan applications is time-intensive, especially when done manually. And incomplete paperwork can halt the application processing endeavor. Moreover, since process documentation is impossible without complete application paperwork, banks can face missed purchases/acquisitions and lost clients. Document processing automation using AI platforms like XtractEdge can save the day for banks or loan extractors.
Most clients aren’t familiar with loan terms and offerings. Hence, a loan officer is the best person to educate applicants on these terms and offerings. Unfortunately, a delay in communication can result in the client eventually losing interest or switching loan providers. That translates into lost business for the bank. A comprehensive Intelligent Document Processing platform should describe each term in simple language so that applicants do not need to approach an executive for help. That will arrest time-lost in communication and knowledge gap.
Manual paperwork is prone to human errors; hence completing them on time doesn’t necessarily give the green light for processing loans. Missing fields and other inaccuracies caused by human entry add to the loan generating time and often translate into loan abandonment.
AI document processing can bridge the gap and guide applicants accordingly with various paperwork. For example, digital filing of loans will immediately raise red flags in case of errors and address them instantly.
Verifying clients’ identity documents and other Government papers is painstakingly long. Much paperwork is involved, which eventually delays the loan processing system. Hence, digital intervention powered by intelligent data capture and document extraction capabilities can reduce the time and labor involved here.
Likewise, getting signatures from all parties concerned delays the whole process. Therefore, banks should opt for a digital signature to match the convenience of clients’ timing preferences without eating loan processing time.
Also, there are other ad hoc challenges like the cost of paperwork and the burden of handling multiple loans simultaneously. Loan aggregators stumble mostly when a manual approach to loan generating and processing is practiced. And when bulk loan applications hit them suddenly, the whole process falls apart.
This is where a digital solution can really make a difference and greatly ease the burden on bank executives. Let’s elucidate with an example.
One of the largest US-based financial institutions faced serious challenges when handling over 25K loan applications per week. Due to the COVID pandemic, an unprecedented surge in Paycheck Protection Program (PPP) Small Business Administration (SBA) related loan applications was witnessed. Manual document processing and data extraction only added to the employees’ overall workload.
With XtractEdge Platform and its computer vision capability, the client was able to digitize and process 170K+K loan applications.
Consumers are increasingly opting for digital-only banks. Hence, it is high time for the latter to shed off their traditional approach to offering banking services and switch to a smarter solution. And many are already doing it by opening their online services. AI is the next best bet for banks as this technology helps streamline comprehensive banking processes, manage customer requests faster with fewer resources, stay relevant and competitive in the market, and make smarter decisions.
The end-to-end document extraction and processing capability powered by AI and ML techniques make XtractEdge the one-stop business solution. Banks, financial services, and other organizations looking for a cutting-edge technology solution for data extraction and processing can benefit immensely using this platform.