7 Uses for Robotic Process Automation in the Lending Industry

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    Today’s lending landscape continues to grow more and more complex, with increasing customer expectations, compliance requirements, and competing technologies. The solution to many of these steadily increasing challenges lies in a technology called Robotic Process Automation, which can be applied to the lending process in the form of lending management automation.

    rpa for lending management automation - automation software

    Face it – Automation software is no longer a cutting-edge technology. It’s not that there aren’t new developments regularly – because there are! It’s just that using advanced technology is becoming the norm.

    Robotic Process Automation (sometimes called Enterprise Automation or Workflow Automation) platforms are becoming more and more prevalent within the Lending industry.

    In fact, a recent National Mortgage News article reports that mortgage industry insiders are urging the mortgage sector to embrace digital technologies.

    Why? We’re glad you asked!

    Today we’ll take a look at 7 ways the lending industry is leveraging Robotic Process Automation (RPA) and how exactly it’s helping lenders to improve their services while reducing costs and increasing compliance at the same time.

    What Is Robotic Process Automation?

    First, let’s take a look at RPA technology – what it is and what it can do within a business setting.

    Robotic Process Automation refers to the use of software robots to help automate business tasks, such as document filing and routing, email reminders and notifications, data syncing, and more. When combined with the other tools included in a robust Enterprise Automation platform, RPA allows for workflows to be built, automating processes from beginning to end.

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    Maybe you’re wondering: What about tasks that require people?

    While RPA takes over for repetitive, rules-based tasks, it doesn’t take the place of humans. Rather, your people are enabled to use their brains and their skill sets to accomplish higher-level tasks while RPA takes care of the everyday minutiae and ensures that nothing is falling through the cracks.

    How can automation like this be applied within the lending sector? Let’s take a look.

    Traditional Lending Practices, Then and Now

    Let’s take a journey back in time, to the 1950s.


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    Imagine an office – any corporate office – in the 1950s.

    Think of the older technologies – typewriters, switchboards, adding machines.

    While the ideas behind these pieces still persist, things have drastically changed from that era. Whether companies are on the cutting edge of technology or not, there’s still a world of difference between that scenario and today’s workplace.

    This is all due to changes in business technology and a little thing (okay, it’s actually a giant, world-changing thing) called fintech, which is short for financial technology.

    This Forbes article summarizes the biggest changes banking and lending saw over the 2nd half of the 20th century. Here are some of the highlights:

    • 1950s: Credit cards
    • 1960s: ATM machines
    • 1970s: Electronic stock trading
    • 1980s: Bank computers and improved recordkeeping
    • 1990s: Internet and ecommerce

    This technology laid the groundwork for the financial industry as we know it today. Consider some of today’s banking and lending features: virtual banking, mobile payment apps, robo-advisors, crowdfunding, and loan software for lenders. These advancements wouldn’t have been possible without the foundation that was established over the past century.

    Consider one financial application that seems pretty simple and straightforward to us today: PayPal.

    What did that process look like 65 years ago? What were the steps that led up to users being able to make a payment with the single click of a button? Answer: all of the things listed above.

    Now let’s get back to how this technology can be applied to the lending industry, creating simplified processes where we once had complex, manual processes.

    Lending Today – With Enterprise Automation

    Lending customers today expect a lot from their lenders. They want instant responses to inquiries. They expect online portals. If they have questions, many of them will look for a chatbot to help them out before they’ll call a helpline or walk into a physical lending location.

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     Here are 7 ways that automation and fintech can help lenders keep up with growing customer expectations:

    1. RPA Workflows Make Processes More Consistent, Faster, Better Defined, and More Reliable

    That's a mouthful, but it’s true. Consider the current state of your processes. Are they defined? If different people from your office were asked to define each step of a process, would their answers all line up? If not, perhaps your process isn’t as defined and consistent as you’d hope.

    Furthermore, if you still have steps in your process that could be automated – like data entry, document routing, task assignments, or email notifications – then your processes could be improved with an RPA platform that would speed up them up by automating those steps. Which brings us to our next point...

    2. Faster Loan Processing

    What’s the point of automating and speeding up your processes? The benefits are two-fold.

    First, of course, automating tasks is going to save you money internally. It’s cutting the overhead of your back office, reducing human errors, and allowing you to process more loans in less time. That’s huge!

    But it’s also bringing those same benefits to your customers. And if you don’t think they care about faster loan processing, think again.

    We live in a culture of instant gratification and immediate results. When was the last time you sat through a 3-minute commercial break?

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    Something that used to be the norm would now seem like an inconvenience, especially for generations that didn’t grow up having to wait before continuing their regularly scheduled programming.

    For Millennials and Generation Z...(that's not zombies; it's the generation after Millennials)...communication has always been at their fingertips. They were born with cellular phones in their hands, with the ability to share thoughts, memories, and more, with the click of a button.

    Translate those expectations to mortgage loans, and it’s plain to see why lending automation is a necessity for meeting the expectations of these customers.

    3. Customer Portals for Loan Applicants

    Enterprise automation makes it possible for you to delight your customers with portals. These portals can be configured to service your customers in the best, most efficient way possible.

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    They’ll be able to submit requests online using electronic forms. From there, the data submitted can kick off an automated workflow within your organization.

    And because the portals are web-based, your customers can view the status of their applications from anywhere with an internet connection, whether they’re on a computer or a mobile device.

    4. Improved Visibility into the Lending Process

    With workflow automation, each step of the lending process is electronic, which means that you can collect data with each step. Hunting down a loan application to figure out its current status is now a thing of the past. You can search for the document within your document management system, and immediately find out its process status.

    Further, analytics can be gathered from your processes, enabling your organization to make better decisions, refine processes, and adjust resources as necessary.

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     This kind of agile thinking will give you a leg up on your biggest competitors.

    5. Easy-Peasy Lending Auditibility

    By automating all lending-related documents and processes, you increase your ability to respond quickly to risks and to implement future compliance guidelines.

    Though a mortgage loan may never be simple, lenders that leverage new technologies and lending-specific solutions can make the road smoother.

    And if auditors do come knocking, it won’t be a show-stopping endeavor. You’ll be able to set them up with exactly the access they need to be able to view your electronic files and processes, without having to pull your team away from their daily responsibilities.

    6. Electronic Signatures for Faster Loan Processing

    Is your organization stuck using paper-based forms - or printing documents out only to sign and re-scan them - because you deal with documents that require signatures? If so, you’re not alone.

    An electronic signature feature will set you free! It allows users to sign your electronic forms online. You heard us right – you can get official, legal signatures on your documents without having to print them out, sign, and re-scan them.

    If that sounds too good to be true, check this out:

    In 2000, the ESIGN Act made valid the use of electronic signatures, contracts and records under certain criteria.

    Electronic signatures reduce the paper and mailing costs associated with handwritten signatures. And because electronic signatures allow documents to be signed from any desktop or mobile platform anywhere in the world, the technology can give you a distinct time-to-close advantage over less-savvy competitors who don’t use it yet.

    7. Better Customer Experiences in General

    On top of all the reasons listed above, there’s one more way RPA can make your customer experiences better.

    Consider the current communications you’re having with customers. If most of your conversations are purposed around reminding customers to get in certain documents, or customers calling to check in about the status their applications, consider how you might be able to change that pattern.

    When your customers are sent automated notifications for outstanding tasks, and when they can already see the status of their applications online through customer portals, what might your communications be about? How might they be improved?

    With RPA, you can leverage communications to build personal rapport, not to nag about the documents you still need. After all, the system takes care of all of those “strictly business” communications for you, liberating you to have more positive conversations and building customer relationships, which can help with retention in the long run.

    A Real RPA User Scenario – AgFirst

    There are ample RPA use cases in banking and lending. AgFirst represents a real-life case study of a lending operation using robotic process automation.

    AgFirst provides funding and financial services to farmer-owned financial cooperatives in select U.S. states and Puerto Rico. They provide loan services to rural home buyers, farmers, and agribusinesses.

    rpa for lending management automation - agfirst

     When AgFirst came to DocuPhase looking for an enterprise content management (ECM) platform that was open-ended and scalable, we were able to provide them with a solution that improved their financial services business almost immediately.

    Once their processes were paperless and automated, AgFirst gained access to documents remotely and was able to give permissions to external auditors, creating more efficient labor and more constructive use of time by agents.

    "The biggest benefit up to this point has been the availability of our systems to external auditors. If we did not have this system currently, we would be paying a lot more for our external auditors to come in and review our loan files." – Mark Huff, Information Systems Manager at AgFirst

    Want to know more about this real-life application of RPA to the lending industry? Read their story here.

    Learn More About Robotic Process Automation

    If you want to know more details about Robotic Process Automation – it’s history, the advantages of using it, and some more real-life scenarios, check out our free ebook, What Is Robotic Process Automation?

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