Transforming lending with AI automation - Loan origination, servicing and collections

Discover how loan servicing automation is transforming lending process, enhancing loan origination, servicing & collections for lenders as well as borrower.

Oct 21 2024

TABLE OF CONTENT

Lenders are under constant pressure to simplify processes and keep customers happy. Getting a loan must be as easy as a few clicks on phone no endless paperwork, no waiting in long lines.

With automation taking over loan origination, servicing & collections, this is becoming a reality! Automating these key area not only save time but also makes life easier for both lenders and borrowers.

By integrating AI in finance and lending, financial institutions can streamline operations, reduce errors & enhance customer experiences. With advent of automated loan collections to AI in loan servicing, lenders are now able to manage accounts more efficiently.

If you want to stay ahead in the lending industry, understanding the importance of automation is must!

AUTOMATION OF LOAN ORIGINATION

Automated loan origination and generative AI in lending offer greater accuracy than manual methods in tasks like underwriting and credit analysis. As more lender shift to loan origination automation (via AI Agents or otherwise), industry has seen growth in market penetration, client base expansion & increased revenue streams. To list a few:

End to end loan management
24/7 Customer support
Automate document collection (faster loan processing)
Recover dropped off loan applicants
Automates approving, disbursing or rejecting applications.
Automates underwriting decision
Identify high risk borrowers early on with consistent pre screening checks

From start of the application to deciding on credit limits, automation can transform how you handle loan origination. As a lender you might be looking for ways to streamline your process. Let us see how automation can help you tackle common challenges.

Manage high application Volumes

If you are experiencing a surge in credit applications and struggling with staffing issue, automation can ease your workload. It allows you to process applications more quickly, reducing the pressure on your team.

No more inaccuracies and inconsistency

When you manually input data from applications or perform calculation, errors can easily occur. Automated workflow help ensure you that all data is accurate and consistent, which is how you can save yourself from costly mistake.

Scale your operations

Relying on manual reviews and constant back and forth communication? It will hinder your growth. With automated process scaling operation become much simpler, allowing you to handle more applications without over burdening your staffs/personnel

Enhance customer satisfaction

Fast and fair decisions lead to happier clients. However many customers feel that their expectations for online experiences are not being met. In fact, a staggering 91% of online applications are abandoned before completion. By automating your processes, you can create a smoother experiences that keeps applicants engaged.

AUTOMATION OF LOAN SERVICING

AI in Loan servicing automation streamlines and enhances the management of loans throughout their lifecycle, benefiting financial institutions, borrowers & the overall lending process in several impactful way.

Financial institution can create a more responsive and customer centric lending environment, positioning themselves for sustained growth and success in an increasingly competitive landscape.

Self-Service Borrower portals

Lenders create self-service online portals where borrowers can access their loan information, make payments & manage their accounts 24/7. AI in loan servicing via AI Agents can enable real time assistance.

Automated communication

Artificial intelligence in loan servicing sends reminders for upcoming payment, confirmations for received payment & maybe alerts for any changes in loan terms or condition.

Keeping borrowers informed and engaged, reducing missed payments and enhancing compliance with loan terms is as important as collecting payments from them.

Compliance monitoring, reporting

A lender can use automated compliance monitoring to track regulatory changes and ensure adherence to all applicable laws. It automatically generate compliance reports and flags any potential issues.

Loan modification processing

When borrowers request loan modifications due to financial hardship, an automated workflow guides the servicers through required documentation, eligibility checks & approval processes.

AUTOMATION OF LOAN COLLECTIONS

Loan collections process is a critical aspect of auto finance collections, focusing on the recovery of overdue payments from borrowers. It involve series of structured steps and strategies to manage delinquent accounts effectively while maintaining positive customer relationships. Generative ai in auto finance can prioritize accounts based on delinquency levels, sending targeted communication to borrower.

Automated loan collections also increases likelihood of successful collection while maintaining positive relationship with borrowers.

Pre Collections phase

Ai in auto financing continuously monitors loan accounts to tracking payment schedules and identify delinquent accounts as soon as payments is missed

Establish a proactive communication plan to remind borrower of upcoming payments and provide information on payment methods, due dates and potential consequences of late payments.

Sending payment reminders

Once payment is missed, loan collections bot send reminders to borrowers via email, SMS, or automated phone calls.

Negotiation and payment arrangements

During conversations with borrowers, collections representatives assess their financial situation to determine if they can resume regular payments or require assistance.

Offer options such as payment extensions, restructuring the loan or maybe setting up a modified repayments plans that allows borrowers to catch up missed payments without further penalties

Automate and boost right party contact (RPC) and promise to pay (PTP)

Automated workflows take charges by proactively reaching out to the appropriate party ensuring timely and effective communication. And this include not only contacting borrowers but also verifying their commitment to payment plan.

AI agents effectively track the number of debtors who have committed to making payments by a designated deadline. By taking lead in reaching out to debtors and monitoring payment agreement, businesses can improve cash flow and reduce the risk of bad debt.

Escalation procedure

If a borrower continues to miss payments despite reminders and arrangement, late fees may be applied according to the loan agreement, serving as a formal notification of the consequences of non payment.

Floatbot.AI

Floatbot.AI is LLM powered AI Agent (Multi-modal Voicebot, Chatbot, Textbot, Emailbot) and Copilot (Real-time Agent Assist) platform. AURA and LEXI, powered by Floatbot.AI, are AI Agents trained and built for lending and leasing industry.

Automate loan origination, servicing and collections from one platform. Floatbot.AI is omni-channel AI platform that integrates with 15+ customer touch points including Website, Mobile app, Call, WhatsApp, Email and more.

We are pre-integrated with leading Lending and Leasing applications and Contact Center technology providers such as Genesys, NICE CXOne, Five9, AVAYA, Cisco WebEx, etc.