THE EVOLUTION OF THE LOAN ORIGINATION SYSTEM FROM MANUAL TO DIGITAL

Worldwide, the LOS (loan origination system) market reached $4.8 billion in 2022 and is anticipated to surge to exceed revenue generation of US$ 9,544.70 million by 2030, marking a robust compound annual growth rate (CAGR) of 10.2% during the period from 2023 to 2032.

Loan origination software (LOS) is designed to automate and streamline the loan origination process from handling loans to application and funding. It manages and oversees the entire loan origination lifecycle, from initial application through underwriting, closing, and ultimately funding the loan.

Evolution from Manual to Digital LOS

The traditional loan origination process was lengthy and complicated compared to digitalized LOS, involved paper-based manual functioning, and was time-consuming. However, the digital revolution has transformed the loan management software, making it faster, more efficient, and cost-effective.

Application Submission– Start by submitting loan applications, online applications, document uploads, and e-signatures electronically and securely.

Information Gathering– Next, it automates evaluating the borrower’s creditworthiness based on predefined criteria. This can include credit scores, income verification, and other financial information.

Approval or Denial– Here, the risk associated with the loan is analyzed, and the decision to approve or deny the application is based on established guidelines.

Credit Evaluation– Once the risk is analyzed, it calculates the interest rates, fees, and terms for which the borrower qualifies based on their credit profile and selected loan product.

Closing and Disbursement– This ensures that the loan origination process adheres to regulatory requirements and internal policies for managing disclosures, legal documents, and regulatory reporting.

Documentation Management– After completing the process, it stores and manages all necessary documents related to the loan application and closing process.

Perks of adopting a Digital Loan Origination System (LOS)

Embracing a digital loan origination system empowers businesses with myriad benefits, from gaining a competitive edge to enhancing customer service and ensuring regulatory compliance. Adopting LOS enables enterprises to navigate the complexities of the lending landscape effectively in terms of automation, analytics, and flexibility.

Customer Centric: Through a digital loan origination system, lenders can maintain a customer-centric approach by meeting customer needs with intuitive self-service portals, real-time application status updates, and personalized communication channels, fostering intense customer satisfaction and loyalty.

Stay Regulatory Compliance Ready: Lenders have unparalleled flexibility and scalability with the Servosys loan origination system. This empowers them with regular tracking and reporting functionalities, reducing the risk of penalties and ensuring compliance with industry standards.

Gain a Competitive Edge: By leveraging the digital lending origination system, lenders can automate the credit decisioning process and analyze borrower data effectively. Our LOS offers tailored loan products to meet individual needs and manages performance using accurate data. This enables better monitoring, evaluation, and adjustment of performance.

Why switch from manual to digital LOS?

The BFSI industry requires an Ultra-modern digital Loan Origination System (LOS) to address the challenges associated with manual application processing operations, such as verifying application information, determining loan terms, and preparing documentation. These manual operations have proven to be time-consuming and resource-intensive. Banks can automate these manual operations with a digital and modern LOS, saving time and resources while increasing their application processing capacity.

Servosys low-code platform is the ultimate solution for banks and financial institutions seeking to create a custom loan origination system, enhance its capabilities, and introduce new features with minimal coding.
With Servosys, it’s effortless to implement upgrades and launch new functionalities through intuitive visual development and drag-and-drop capabilities, enabling the development of robust and engaging banking applications.
It ensures accuracy and consistency in handling loan applications and reduces the chance of mistakes, providing a smoother and more reliable experience for the bank and its customers.
It enhances customer satisfaction as clients experience a more streamlined application procedure.
Additionally, it facilitates better risk management practices, allowing banks to assess and mitigate risks associated with loan approvals.

Summing Up

Experience Servosys Loan Origination Systems—meticulously tailored to meet your unique business needs. Servosys provides unparalleled flexibility, promptly adapting to evolving market dynamics and regulatory demands without disrupting current operations. Embrace the future of digital lending platform, promising unparalleled efficiency, agility, and competitive advantage. At Servosys, we are committed to empowering BFSI to process loan applications efficiently; cloud-based platforms offer unmatched flexibility and scalability for lenders. Ensuring a seamless and positive user experience for both customers and internal users.