Essential platforms and tools to automate your lending business

Technology has successfully penetrated every business venture today; it’s almost impossible to imagine how lenders could survive without using tools to automate their lending business. Your loan business could succeed when operating on a small scale.

But thinking you can manage a large-scale, sustainable, and cost-effective loan business without the necessary tech tools is nothing but a pipe dream.

There are several tools and platforms to choose from, each with its own set of features and capabilities. Your choice will be based on your type of loan business, scale operations, country regulations, and how best to serve your customers.

Before we dive into the essential tools to automate your lending business, let us take a look at how important automation tools and platforms are to your lending business operations.

Loan origination automation

Through mobile apps, USSD, Buy-Now-Pay-Later options, and APIs, you can streamline your customers’ loan application process. These tools make it easy to submit forms, verify identities, and simplify the decision-making process of approving or denying loan applications.

Simple decision engines you can rely on include common risk assessment criteria such as checking multiple credit bureaus, KYC forms, etc. Larger-scale loan businesses can rely on more advanced decision engines including AI and machine-level algorithms.

Not only does it benefit you, it provides a smoother experience for your borrowers and increases their accessibility. Otherwise, performing these tasks manually would be inefficient and cost you lots of money.

Data-driven decisions

To reach a large number of borrowers and make the right assessments, your loan business needs to be tech-enabled. Manually performing credit assessments is the simplest recipe for disaster, loss of funds, and business shutdown. With how clever fraudsters have gotten in recent years, it’s only right to power and fortify your loan business using tech.

Automated approval and disbursement

Would you rather go through a thousand and more paper applications and send handwritten approvals and denies or collect forms electronically and swipe left to approve and send funds with a simple click from the comfort of your home office? An automated approval and disbursement system is precisely what you need to reach thousands of people at a go, make decisions, disburse funds, and go on with your business operations smoothly.

Assured loan payments

Debit cards, direct debit, and other online payment options make it simpler and more convenient for borrowers to repay their loans. Not only do these tools provide an efficient, smooth, and legal debt collection process, but they also inform you on when to collect and how to collect.

We’ll break down the tools to automate your lending business into two important categories:

Loan Management Tools

1. Channels: These serve as your digital storefront for your customers to reach you. Lenders have the options of mobile apps, user-friendly websites, USSD options, and other alternative channels for a wider and inclusive reach. However, these channels have to be error-free, secure, easy to navigate, easy to understand, and accessible so your borrowers can send loan applications with simple clicks.

2. Decision-making tools: Make more accurate assessments and smarter decisions with tools that assess multiple data points at once. These tools include credit bureau reports, in-built KYC forms, elaborate/sophisticated SDK linked to your mobile app, etc. Alternative data sources you can explore include Indicina – which provides analytics to simplify credit decisions for lenders; or Periculum – a powerful credit scoring tool.

3. Automated payments/disbursement tools: Lenders can keep tabs on their money flow with automated tools such as Paystack, Stripe, and Monnify. These platforms take care of everything from receiving loan repayments to safely disbursing funds, leaving lenders enough time to focus on other important aspects of their loan business operations.

4. Smart loan collection tools: The same tools available for transferring money can also be used for debt collection. These include Direct Debit, Remita, or payment engines such as Flutterwave, Paystack, dLocal, and Stripe. Monnify and Sterling Bank also offer core banking technologies for transfer and virtual account services.

Client Management Tools

5. Customer engagement tools: For responsive targeted communications and company updates, email platforms like SendGrid and MailChimp have been long-standing partners to help you engage with your customers. If your customers are not active on email platforms, sending reminders and quick updates via SMS is the way to go using great tool options like Infobip or Route SMS. You could also explore push notifications using Firebase or Microsoft Cloud to keep your customers informed and engaged.

6. Customer relationship management tools: With Zoho CRM, you can manage your customers’ profiles and provide support. Constant Contact allows you to create effective email marketing campaigns to meet your business goals, and with Freshchat’s in-app chat feature, you can answer your customers’ queries and troubleshoot problems in real-time.

7. Bookkeeping tools: On an equally important scale, you need bookkeeping platforms to make sure you are not losing money. Keep track of reports and customer information with accounting tools like Zoho Books, Xero, and Loandisk. Large lenders may need to implement their own ARP or core banking applications such as Instafin or Mifos.

Milk technology for all its benefits

We live in a simpler world now where you can leverage technology in every aspect and process of your lending business. Lending automation sets you up for measurable success, better customer relationship management, and overall business growth.

The best part is that Lendsqr provides an end-to-end platform that allows you exclusive access to all these features when you sign up. Lendsqr is one of the leading loan management software in the world, and you can use such a formidable ally to build a tech-powered loan business. Check here to see what problems Lendsqr is solving for its lenders.

If you have more questions on how to get started, send us a message at [email protected].