Eliminating the Paper Trail

It’s no secret that technology is pushing us away from paper documents. Using digital loan origination eliminates the need for paper documents, which only slow processes down and delay decisions. In a digital application, legal documents such as income statements and driver’s licenses can be scanned in through a mobile device. The information remains secure and can be almost instantly sent to the lender for processing, meaning it can also be immediately reviewed.

Eliminating the paper trail helps lenders to mitigate the growing risk of fraudulent loan applications. Fraudulent applications are directly correlated to default and delinquency. Using a loan origination system, machine learning can better identify those who may be potentially fraudulent.  Factors such as identity theft, collateral inflation, income misrepresentations and employment misrepresentations can all be caught more easily.  Based on the findings, lenders can determine the next step in the underwriting process.  In an economic downturn, lenders need to be confident in every lending decision.

Providing Consumer Relief

Now more than ever, consumers are looking for ways to relieve themselves of payments in the near-term. Strong lending technology partners are offering create ways for lenders to not only retain business but win new business during this time. Some lending technology partners are offering their customers curated programs that allow them to contact existing customers to offer them refinancing on their automotive loans. This is just another example how lenders can take advantage of the direct channel opportunity.

For example, if a consumer is a long term customer with a specific bank, yet their auto loan is with another financier, that bank would be smart to contact that customer regarding the refinance of their loan. If the bank can offer incentives such as no short term payments, the customer is likely to take advantage of the offer, which only further solidifies the customers loyalty to that bank. With interest rates seemingly low, anything the bank refinances now will be a better deal than what the customer financed two or three years ago.

Lending technology systems can help lenders to become more digital retail friendly during a time where consumers are looking to take advantage of new channels that are available to them.

Opportunity Still Exists

Today’s automotive lenders with a competitive advantage are using a modern loan origination system.  Integrating all facets of market segment such as online, mobile and dealer relations gives lenders better opportunity to win borrower applications that turn into booked deals. Risks are minimized, decisions are made quickly and efficiently, and lenders can maintain a competitive advantage during economic hardships.