If you have been working in the financial services sector for a long time, you can probably remember the days where every area of your institution was a separate entity. For example, you may have had separate divisions for retail banking, private banking, trusts, investments, consumer lending, and indirect lending, and each of those really didn’t have much knowledge of the other business units. It was very common to have completely separate IT systems for managing the accounts generated and maintained within each area. Most likely, it could’ve been argued that this compartmentalization may have even fueled the fire of competitiveness within your organization in a way that limited organic growth.
While some of these dynamics have simply been a statement of corporate culture, it would also be reasonable to assume that limitations in technology have also fostered these characteristics within organizations. We have now reached an age when that is no longer true. Today, it would be fair to say that if your organization maintains this inter-departmental segmentation, it does so despite the industry-recognized benefits of tearing down those proverbial walls. Lending is a great example of where we can still see this handicap.
Whether it is direct auto, indirect, mortgage, credit cards, or a myriad of other loan offerings, having a loan origination system to process those requests is a critical technology purchase. However, it is also extremely important to plan for connection points from the system to your core servicing system. There are several benefits to this for you to consider. Here are just a few:
- CIS Lookups: Connecting to your servicing system to allow retrieval of customer information can speed up the data-entry process for new applications and allow real-time balance information for both loans and deposits to be considered in underwriting. Credit bureau information can be a bit stale depending on the report date, and there is no better source of information than the system that manages the day-to-day interest accrual and payment information of your customers/members. CIS lookups are engaged when creating the application, and will allow the user to perform a search on fields such as SSN, member/customer number, name, address, or phone. Once a matching record is selected, that person’s information can then be imported into the application.
- New Account Setups: When a loan has been approved and needs to be processed, there are several steps that must be processed by your staff to ensure that the loan will be boarded correctly to your servicing system. Many of these steps are performed directly within the loan software. This includes verification of the borrower’s information, channel, or collateral details. Additionally, the user must fund the contract, create disbursement records, and generate loan documentation for customer/member signature. Once that is complete, the loan must be sent to your core system. Without a connection for the loan software to your servicing system, the user will have to perform redundant data entry for all of the customer/member information and loan details. This can be time consuming and can open the door for clerical errors. Having an option for setting up new accounts in your platform will provide users an easy method for transferring the customer/member and loan information as quickly and accurately as possible.
- Solicitations: Marketing loans through advertisements, pre-approval campaigns, and mailings is an incredibly important way to promote your loan products. If your system can support uploading and tracking campaign files along with using coupon numbers to process pre-approvals quickly in the system, this will allow your users to spend less time inputting applications and more time focusing on other cross-sell opportunities.
- Fraud: If your system has the ability to send fraud data to the loan origination system, it will allow the underwriting process to have awareness of customer/member issues or history that may not be reflected on a credit report.
Consider how you might leverage connection points within your loan software. Doing so reduces user errors, improves underwriting and ultimately improves the overall customer experience by increasing the speed of decisions. With a little planning and investment, the barriers to a free flow of information between the different areas of your institution can be eliminated.
MeridianLink’s LoansPQ platform offers superior integration to any of the major core systems. As we mentioned, these are just a few of the benefits financial institutions can expect from complete and efficient integration. As if that’s not enough, our XpressAccounts platform for account opening and funding operates on the same platform to further streamline and consolidate operations.
Besides having the right technology to protect against fraud, MeridianLink’s Achieve Analytics team also helps financial institutions of any size leverage analytics and system expertise to better detect and prevent fraud. To download our free eBook that explains how analytics can play an important role, please click the button below.
Photo Credit: Rhys A.