De-Risking the Lending Process Risk can be a good thing when it comes to personally expanding your horizons or trying something new — but not when you’re originating loans and working with confidential information. Yet, numerous risks still exist in loan origination, especially for those who use manual, legacy tools. That’s why investing in secure, cloud-based software that proactively mitigates risk is so crucial. In loan origination, derisking the lending process means: Minimizing errors in data collection and document preparation Creating consistency across applicants applying for similar loans Centralizing information in one place for all stakeholders Prioritizing compliance with more reliable, repeatable processes and procedures Improving credit assessment abilities with the right tools and data sources
The 4 Biggest Risks in Loan Origination Spotting the potential risks in loan origination is not always easy because they often start as minor inconveniences. Look out for: 1. Data silos. Many lenders purchase different tools for different jobs, resulting in disparate systems that are difficult to connect. This requires employees to manually transfer information, creating multiple handoffs that are prone to human error. 2. Security vulnerabilities. Personal information is necessary for loan origination, but every new document and piece of information creates added risk. When lenders forgo secure data transfer capabilities that go directly to the recipient (inherent in SaaS software), they create multi-step data exchanges that add unnecessary touchpoints to an already risky process. 3. Poor technical support. Loan origination systems are complex tools that require numerous users of all skill levels. To ensure the most secure and effective use, UX design must be intuitive, regularly updated, and backed by premium customer support that’s there when you need it most.
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• May-June 2022
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4. Slow system updates. Many loan origination systems are decades old and rarely updated. This makes it difficult to move nimbly when market changes arise or users require new capabilities. The best loan origination platforms release updates regularly to address users’ changing needs as they happen.
Design Matters A unified loan origination platform has numerous implications for more efficient processing with less risk. Not only does it open up opportunities to blow by competitors still using legacy systems and processes, it also future proofs lending operations from the moment of implementation with a system inherently built for automation and seamless connection. From its inception, SPARK’s SaaS platform was made for collaboration and efficiency. It naturally de-risks the lending process by allowing users to: Centralize information. All assets and documents are kept in one place for easy location and access. Plus, SPARK allows for customized views, document metadata, and on-the-fly rearrangement of document lists so users can focus only on files relevant to their role. Create secure access. Users can create unique roles for external stakeholders and grant direct, customized access. Applicants/borrowers can easily provide documents, check loan status, and receive alerts when new actions are required. Or, lenders can invite members of their outside legal team to review loan documents all in the same system. Integrate with the SBA’s E-Tran system. SPARK has a direct connection to SBA’s E-Tran system, which eliminates the need to rekey application information and supports directly transferring loan documentation with the push of a button. SPARK also anticipates SBA eligibility requirements by proactively surfacing errors and warnings regarding missing information, avoiding unexpected delays later on. Most of all, we’re constantly innovating and seeking out improvements to our platform. Every eight weeks, we release new software updates, ensuring the functionality is dependable and the platform is evolving.
Experience the power of SPARK today — schedule a demo at lendwithspark.com
