Automated Loan Processing Software
Features, Integrations, Benefits, Costs
Bringing in 17-year expertise in financial software development, ScienceSoft helps banks and lending companies implement reliable automated loan processing solutions.
Automated Loan Processing Software in a Nutshell
Automated loan processing software is a solution that streamlines all stages of loan cycle, from risk assessment and decision-making to credit reporting and repayment control.
Such solutions rely 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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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 Software
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 software implementation.
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.
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Expert advice from Natallia Babrovich, ScienceSoft’s Senior Business Analyst and Financial and Banking IT Consultant: 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. |
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Costs and ROI of Automated Loan Processing Software
The costs and timelines of implementing the custom 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+. Automated loan processing software can bring up to 225% ROI in the first year of implementation. |
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x2–x25+ faster loan processing.
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90%+ reduction in time to create loan reports. |
15–20% increase in loan origination volume. |
20% decrease in operational costs. |
Improved accuracy of borrower document processing and loan-related decisions. |
Simplified compliance with the required lending standards and regulations. |
Off-the-Shelf Software ScienceSoft Recommends
Fusion DecisionPro by Finastra
Best for
Automated processing of consumer and small business loans.
FEATURES
- Rule-based assignment of loan processing tasks to the lending team.
- AI-supported loan underwriting.
- Configurable loan approval hierarchies.
- Instant communication of loan-related decisions to borrowers.
- Pre-built APIs to integrate with a customer portal, accounting software, and other required systems.
- FACT Act and Regulation B compliance.
CAUTIONS
May not provide compliance with the lending regulations of the countries you operate in.
Comarch Loan Origination
Best for
Automated processing of complex commercial loans.
FEATURES
- Automated capture and validation of borrower credit documentation.
- Automated scoring based on the analysis of borrower credit risk.
- Support for multi-product and multi-entity loan agreements.
- Rule-based application of covenants to the loan agreements.
- Full audit trail of loan processing activities.
- Compliance with KYC requirements, GDPR, PSD2, and Mortgage Credit Directive (MCD).
- Permission-based access control.
CAUTIONS
Customizing the product to your unique business loan processing needs may be costly and complicated.
LoanServ by Sagent
Best for
Mortgage and personal loan processing automation.
FEATURES
- Real-time aggregation and processing of loan applications.
- Automated valuation of non-financial collaterals for secured loans.
- Rule-based decision-making on loan approval or decline.
- Automated generation of loan agreements.
- Configurable dashboards for loan repayment tracking.
- Seamless mobile access.
- Compliance with the US-specific lending regulations.
CAUTIONS
May be hard to integrate with your legacy software.
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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 Software Development 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.