Manage variability and seasonality for loan processing
Streamlined loan processing and reduce
processing time to 30 minutes from 4 hours
Process
The process in scope is the centralized Loan Processing Unit for global financial institution. The Loan processing unit for the bank got new loan applications as collected by various bank branches or other sales channels. The team was then responsible to verify documents and determine the eligibility criteria for the loan applicant, which included getting data from third party providers. The team then either sanctioned the loan or asked for additional documents or rejected the loan. Since the processing team was centrally based, there was a lot of to-and-fro between the processing Unit and the sales channel causing delays and irregular updates to the loan applicants. In addition, high volume of transactions end of the month required processing team to work overtime to complete monthly numbers.
Solution
Robotic Process Automation (RPA) with the help of Intelligent Character Recognition (ICR) was used as a solution to automate the Loan processing task. ICR was used to extract information from documents submitted and update the loan processing system. An auto check was performed at this stage itself for completeness of loan file for required documents. In case of missing documents the sales channel was contacted for submission of pending documents from the customer. Once the file was complete, loan processing steps that required third party information sources like credit check and collateral valuation, were initiated and collated in the loan file. Regular updates were pushed to the sale channel and applicant on the current status of the file to ensure least amount of follow ups.
Challenges Addressed
Pressure from sales for updates & quick TAT
Transactions TAT is not standard, and sales would push for updates where they see customers looking for a quick decision, resulting in pressure for processing team.
No DMS and incomplete documentation
The processing did not have a document management systems (DMS) and at times applications were pushed for processing even when all documents were not collected.
Daily/monthly volume fluctuations
Volumes are high during end of the month or quarter as the sales channels push applications to meet targets for the period.
60% effort on data entry and follow ups
The processing team was spending most of their time in data entry of applications and follow ups on new documents, rather than on processing of the loan.
Outcome
Loan processing time reduced from 4 hours to 30 minutes.