Loan Processing Automation
Use Cases, Capabilities, Costs
Bringing in 18-year expertise in financial software development, ScienceSoft helps banks and lending companies implement seamless loan processing automation.
Loan Processing Automation in a Nutshell
Loan processing automation is aimed to streamline all stages of loan cycle, from risk assessment and decision-making to credit reporting and repayment control.
Automated loan processing software relies on artificial intelligence (AI), robotic process automation (RPA), optical character recognition (OCR), and other advanced techs to eliminate time-consuming and error-prone manual lending tasks.
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Loan types that can be automated:
Essential integrations: A customer portal, accounting software, payment gateways, and more. Implementation time: 10–15+ months for a custom automated loan processing solution. Development costs: $200K–$1M+, depending on the solution’s complexity. Annual ROI: ~225%. |
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Loan application processing
2x–25x+ faster capture and processing of digital and paper loan applications with the help of RPA, ML, and intelligent image analysis techs.
Loan underwriting
Borrower risk assessment in minutes rather than days and 100% accurate loan approvals due to AI-powered risk analytics, fraud detection, and loan decisioning.
Loan agreement management
Automated loan agreement creation to drive up to 4x faster loan issuance. AI-based suggestions on the optimal loan prices to maximize profitability.
Loan repayment control
Full visibility of open and paid loans and automated debt collection to achieve up to 300% higher productivity of the loan servicing teams.
Borrower interaction
Automatically processing >50% of omnichannel borrower inquiries and communicating loan-related details to clients using intelligent chatbots.
Regulatory compliance
100% compliance with the required lending standards and 90%+ faster regulatory reporting due to automated compliance checks.
Key Features of an Automated Loan Processing System
For each loan processing automation project, ScienceSoft creates software with unique functionality tailored to the specific needs of a particular customer. Below, we share a list of features that form the core of any automated loan processing solution.
Essential Integrations for Automated Loan Processing Software
Connecting your loan processing solution with the relevant back-office and third-party systems helps speed up loan origination and minimize lending risks. ScienceSoft recommends establishing the following key integrations:
- A customer portal: to process loan applications faster; to instantly communicate loan decisions to borrowers, send invoices and notify them of due repayment dates.
- Credit rating platforms of the selected credit rating bureaus (e.g., Experian, Equifax): for facilitated credit rating checks and credit report submission.
- Payment gateways of banks or independent payment service providers (e.g., Stripe, PayPal): for smooth processing and real-time tracking of loan repayments.
- Bank accounts: for centralized tracking of loan-related transactions, timely transfer of the approved funding amounts to the borrowers, and streamlined reconciliation.
- Accounting software: for accurate recording of loan-related transactions in the general ledger.
- A business intelligence solution: for comprehensive loan analytics and reporting.
How to Achieve High ROI for Loan Processing Automation
Relying on decades-long experience in financial software design and development, ScienceSoft’s consultants defined the main factors that help drive maximum payback from loan processing automation.
End-to-end automation
To eliminate time-consuming manual workflows and free up the lending teams for high-value tasks.
Advanced analytics
To ensure accurate decision-making and leverage data-driven forecasting of borrower payment behavior.
Focus on security
To protect your IT system against all types of cyber attacks.
Your loan processing solution needs to stay compliant with the up-to-date financial security standards and legal requirements for credit reporting. To avoid unnecessary headache in the future, make sure your software offers flexibility to smoothly and promptly adopt the newly-emerging regulations.
Costs of Loan Processing Automation
The costs and timelines of implementing custom automated loan processing software vary greatly depending on:
- The number and complexity of functional modules, including AI-powered features.
- The number and complexity of integrations.
- Role-specific requirements for UX and UI.
- Non-functional requirements: security, performance, scalability, availability, etc.
- The sourcing model (full outsourcing, partial outsourcing, or all in-house).
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From ScienceSoft’s experience, a custom loan processing automation solution of average complexity requires $200,000–$600,000 in investments, while building a complex system for credit documentation automation and intelligent loan decisioning may cost $1,000,000+. |
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You need a solution to automate specific loan origination workflows, e.g.:
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You need software that is compliant with all the required lending regulations, including region-specific standards. |
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You need a highly secure solution providing advanced capabilities (e.g., intelligent fraud detection). |
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You need flexible loan processing software that is easy to evolve as your business grows or new legal compliance requirements appear. |
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You want to avoid costly and effort-consuming integration of the loan automation software and your internal systems. |
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You want to leverage smart-contract-based loan processing automation. |
A Featured Success Story by ScienceSoft
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Loan Automation for a US-Based Microfinance CompanyScienceSoft designed and built custom loan management software for a reputable financial services company with 50+ offices across the US. The solution provides robust automation of business-specific lending processes, including:
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About ScienceSoft
ScienceSoft is a global IT consulting and software development company headquartered in McKinney, Texas. Since 2005, we design and develop effective lending solutions, including loan processing automation systems. Being ISO 9001- and ISO 27001-certified, we apply a mature quality management system and guarantee that cooperation with us does not pose any risks to our customers’ data security.
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