Workflow is concept that has been doing rounds for decades. You can see it in the assembly line in a manufacturing company where different works are done in different sections but the product moves on continuously.
Workflow echoes the research of Frederick Taylor on industrial efficiency. It ensures that there is no wastage of efforts and labor. Most of it in this modern day is done by robotics that ensures perfect auto assembly.
Just as the automobile sector, the approach of the entire business world towards workflows has also evolved as well.
Now you can see that there is the use of reusable interoffice envelopes is replaced by email with attachments. This increases the workflow making it more accurate as you do not need to follow the cumbersome processes such as:
- Insert the documents
- Wind the string around the cardboard button
- Cross off the name of the last recipient
- Add the name of the next recipient
- Post it on time and
- Hope it reaches to the recipient on time.
The state of the art workflow systems of today supports the business specific needs at the enterprise level.
The transformation to digitization
The transformative factor in workflow and its evolution to digitization is noticed in factory or office. There has been transformation in all sections of business including:
- Maintaining physical records
- Replacing the manual actions with automation
- Decisions are now more data driven and nothing is processed by hand as it was previously.
In fact the benefits and profits of a business now is greater if the digitization of content, process and information is greater.
Just as the entire business world has transformed their workflows with automation for better service and improvement in manufacturing, the financial sector has also taken up this approach to make their lending process faster, better and more convenient.
Changes in the auto lending sector
Recently, fintech advances have made similar improvements in their workflows that have helped the lenders, both traditional banks and non-bank sources such as Liberty Lending and others by a great extent. This change is most apparent in the auto lending sector as compared to other segments of financing.
- It has helped the auto financing companies to reduce their operating costs which in turn has benefited them as well as the consumers now who do not have to encounter higher cost of borrowing.
- It has also ensured more consistency in process and decision making which in turn has proved to be an asset for the auto financing companies as this has helped them to meet the requirements and standards of the auto lending industry that is increasingly overseen and controlled by different rules and regulations.
The loan underwriting workflow of the auto lending cycle has become more efficient than before thereby accelerating the entire process.
Benefits of digital auto loan workflow
The digitization of the auto loan workflow has made the underwriting process more powerful than it was ever before. With the recent advances in technology, it has changed some of the most significant characteristics of digital auto loan underwriting workflows. This can help both the lenders as well as the consumers in a great way.
- Cloud scalability: This technology helps in matching the workflow demands more easily. The modern loan origination software is typically hosted in the cloud and it provides the lenders with in better processing capacity as compared to a legacy lending software. Different cloud providers such as Amazon Web Services invest in processor, communications infrastructure and storage to ensure optimal performance and availability. When processing demands change along with the lending cycles, even the heaviest volume of auto loan underwriting workflows can be handled most efficiently while running on cloud.
- Decision rules: This process affects the decision rules that drive workflow. This in turn eliminates the manual steps in the auto loan underwriting workflows as it is replaced with automation. Decision rules are configurable by the business users that relieve the underwriters of making tedious ad repetitive decisions. This in turn eliminates the chances of errors due to monotony and boredom. Decision rules consistently and automatically evaluate the information of the applicant in order to determine creditworthiness most accurately. Since decisions are automated there is little to no intervention required by the underwriter.
With these specific technological advances implemented in auto loan underwriting to replace the manual underwriting tasks, the auto finance companies can do a lot of things more effectively and easily that was not possible before. A few of these benefits include:
- Assigning loan applications automatically to precise underwriting queues
- Prioritizing and categorizing applications based on dealer, status, geography, watch lists, and other criteria
- Establishing different rules for different premier or standard dealers
- Auto-approving applications in quick time resulting in a near-instantaneous response to the eligible applicants
- Auto-declining applicants based on their policy guides quickly eliminating wastage of time spent on the unqualified applicants
- Managing adverse action notifications by the digitized workflows
- Establishing a better override criteria and
- Authorizing all override decision by the underwriter in quick time and consistently.
In this modern world, when decisions are automated it will increase the speed of lending making it perfect. It will enable the officials of the auto financing companies to respond quickly. As for the underwriters, they will have more time to focus on bagging deals that specifically needs their experience and expertise.
Alternative credit data
Digital auto lending workflows will also help in capturing alternative credit data of the consumer. It will consider several digital transactions made by the customer. This data is made available to the lenders more easily as its service. The data will include payment records of different things such as:
- Gas and
It will also collect information regarding the income statements, rental records, employment history and all other alternative indicators that will tell about the financial position of the applicant.
Since this alternative credit data works with the conventional credit bureau data, it provides an accurate and more detailed creditworthiness and assessment. This is especially helpful in determining eligibility if the applicant has a low credit score.