Industry: Loan Origination

Loan Origination Software

Written by Cassidy Bellville on May 23, 2024.

Loan Origination Software

Software that powers business growth and agility for loan origination.

Real-time approvals:

Automate your loan origination processes for real-time digital lending approvals.
Smarter decisioning:

Simplify data integration and deploy risk models in minutes to power smarter decisioning.
Greater independence:

Empower business users to make changes in minutes with no-code, drag + drop tools.

BENEFITS

Create loan origination experiences that drive customer loyalty.

Are you finding it increasingly difficult to keep your decisioning technology in sync with business needs? Provenir’s loan origination solution is designed to empower your team to quickly and easily take control of your risk strategy.

Integrate more data
Integrate more data

Data integration tools make data access fast and easy. Integrate to both internal and external data sources using our Data-as-a-Service solution. Provenir Data and Marketplace lets you explore new data sources covering identity, credit, fraud, KYC, and other traditional and alternative data options.
- ✓ Fully maintained API integrations
- ✓ Aggregate and augment your data
- ✓ Filter by geography, use case and data type
Automate decisioning
Automate decisioning

Our AI-Powered Decisioning Platform enables real-time, fully automated decisioning workflows. Rapidly assess credit risk with predictive models that can be uploaded and deployed into business logic without recoding.
- ✓ Create world-class lending experiences
- ✓ Use predictive analytics to support rapid approvals
- ✓ Eliminate vendor and development team reliance
- ✓ Make smarter risk decisions, faster.
Don’t build, design
Don’t build, design

You don’t need to build from the ground up to get an agile, flexible loan origination solution. Use Provenir’s AI-Powered Decisioning Platform to do the heavy lifting. Simply design and implement your decisioning processes using the no-code interface.
- ✓ Use visual testing to quickly troubleshoot
- ✓ Deploy faster with pre-built Case Management offerings
- ✓ Add data integrations using the Provenir Data Marketplace
Improve collaboration
Improve collaboration

Bridge the gap between your risk, credit, analytics and development teams with visual tools that eliminate technical knowledge gaps. Empower your teams to work together on projects, encouraging the collaboration that drives your business forward.
- ✓ Enable technical and non-technical users to work side by side
- ✓ Support real-time iteration
- ✓ Encourage innovation
Respond faster
Respond faster

Identify and react to new risks and opportunities faster. Combine the power of our Business Intelligence and Decisioning solutions to track decisioning metrics, business KPIs and model performance using real-time data.
- ✓ Use no-code tools for rapid decisioning iteration
- ✓ Track performance changes with pre-built reports
- ✓ Use artificial intelligence and machine learning tools to improve decisioning accuracy
Future-proof technology
Future-proof technology

Eradicate monolithic loan origination software that limits your agility. Instead, uncover the benefits of Platform-as-a-Service technology that is designed and built to scale with your organization.
- ✓ Fully maintained APIs make it easy to connect to any data source or system
- ✓ No-code technology empowers self-sufficiency
- ✓ New features keep you ahead of trends

Elevate Your Customer Experience
Accelerate digital onboarding for world-class customer experiences with dynamic automation and streamlined processes for KYB verification, AML, and risk analytics.
- Ensure merchants meet compliance and regulatory requirements with automated decisioning flows that perform necessary compliance checks
- Fight fraud and mitigate risk with intelligent decisioning insights across the entire customer lifecycle
- Provide a quick and seamless customer experience with real-time approvals
- Simplify verification with intelligent data use to reduce cost and save time
Risk Models That Evolve with the Market
Iterate your risk models as quickly as the market demands, without vendor reliance, thanks to simplified data access and a drag-and-drop UI, all powered by intelligent decisioning and insights.
- Accurately evaluate the risk associated with each merchant with advanced risk assessment tools
- Keep up with market changes with simplified model deployment using AutoML or third-party solutions
- Make more accurate decisions across KYC, open banking, fraud, credit risk, and more with pre-built data integrations easily deployed across your decisioning processes
- Access deeper fraud insights by quickly testing and deploying additional data sets
Proactively Adapt to Market Changes
Anticipate market changes, evolving regulation, and new technological capabilities with low-code decisioning tools that let business users adapt processes and integrations in real-time.
- Embrace self-sufficiency with low-code tech that enables business users to change processes and rules in minutes, promoting vendor independence
- Agility-friendly technology with built-in testing, simulation, and code management lets you quickly promote changes when and where you need to
- Gain proactive AI/ML insights to ensure sure every data point is adding value to your decisions
- Stay ahead of evolving legislation with flexible decisioning capabilities

How can we optimize your

payments risk strategy?

How can we optimize your payments risk strategy?

Discover where we help and when we’re used.

Credit Risk Onboarding

Seamless credit risk onboarding for merchants and customers.

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Customer Management

Proactive customer engagement to maximize lifetime value.

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Collections

Fair collections strategies to maximize the chance for ongoing credit relationships.

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Fraud & Identity

Smarter application fraud detection and streamlined investigations.

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QUESTIONS

Frequenly Asked Questions

Get in Touch

How can we improve efficiency in the lending process with loan origination software?

By implementing a risk decisioning solution for your loan originations, you can streamline the entire loan origination process – from application to underwriting to disbursement. With real-time data access, customizable decisioning processes, and advanced analytics you’ll be better equipped to manage your loan pipeline and customer portfolios more efficiently and effectively.
What’s the best way to integrate data and automated decisioning into our loan origination software?

Loan origination software on its own can’t usually handle a variety of data sources and more sophisticated loan servicing processes.. Most loan origination software has a predeveloped list of data integrations that go hand in hand with pre-built decisioning logic. But with more advanced loan decisioning software in the way of a robust, credit risk analytics and data platform, the sky’s the limit in adding, testing and iterating new data sources.

Why is it better to implement decisioning software instead of building our own loan decisioning software?

In-house loan origination systems often contain your LOS screens and your decisioning logic, all in one. Which sounds great but isn’t actually effective in practice – it limits flexibility and agility, and increases development and implementation time, leading to frustrated business users, impatient loan applicants, and stilted growth.
How does combining decisioning with our in-house loan origination software improve agility?

While it may seem counterintuitive to implement MORE technology, it’s rare that the same technology for your loan origination is effective in powering end-to-end application processing. Simple decisioning found in most loan servicing software can’t handle more sophisticated risk strategies – which is why financial institutions need more sophisticated risk decisioning solutions that can handle real-time data integration, automated decisioning, and advanced analytics.

Balance risk with opportunity across the customer lifecycle.

Auto Loan Origination

Written by Allison Karavos on September 13, 2023. Posted in Resource. No Comments on Auto Loan Origination

BLOG

Auto Loan Origination:
Is the Dealer Still King in 2023?

In the ever-evolving landscape of auto financing, the dynamics of the auto loan origination process have shifted dramatically, thanks to the integration of fintech innovations. This transformation has ushered in a new era where data-driven decisions play a pivotal role in reshaping the automotive lending industry. In this comprehensive guide, we delve deep into the world of auto loan origination, dissecting its process, fraud detection, and the role of fintech.

What is Auto Loan Origination?

Auto loan origination, at its core, is the process through which financial institutions, such as banks, credit unions, or online lenders, create and process loans for individuals seeking to purchase vehicles. This process encompasses everything from the initial loan application to the disbursal of funds.

Understanding Loan Origination System:

A crucial component of auto loan origination is the loan origination system, often referred to as LOS. This is a specialized software platform used by lenders to manage and streamline the loan application process. The LOS ensures that all necessary information is collected, verified, and assessed in a consistent and efficient manner.

How Does the Process of Auto Loan Origination Function?

The auto loan origination process can be broken down into several key stages:

Application Submission: The journey begins when a prospective borrower submits their loan application. This application typically includes personal information, financial details, and the desired loan amount.
Credit Evaluation: Lenders evaluate the applicant’s creditworthiness by examining their credit score, credit history, and other financial factors. The fintech-driven auto loan origination system plays a critical role in automating this assessment.
Data Gathering: In addition to credit data, lenders may gather information related to the vehicle being financed, such as its make, model, and purchase price.
Decisioning: This is where fintech takes center stage. Decisioning, powered by advanced algorithms and big data analytics, helps lenders determine whether to approve or decline the loan application.
Documentation and Verification: Once a loan is approved, lenders require applicants to provide documentation to verify the information provided in their application. This step helps mitigate potential fraud risks and ensures compliance with regulatory requirements.
Loan Funding: After successful verification, the lender disburses the loan amount to the borrower or, in many cases, directly to the dealer.

Decision-Making for Automotive Lending with Comprehensive Data – Sources and Services

In the modern auto loan origination landscape, data is paramount. Lenders now have access to an array of data sources and services that enable them to make more informed lending decisions.

Credit Bureaus: Traditional credit reporting agencies provide credit reports and scores, which remain a cornerstone of the auto loan origination process. Lenders use these reports to assess creditworthiness and determine interest rates.
Alternative Data: Beyond traditional credit data, fintech lenders tap into various data sources, such as utility bill payments, rental history, and even social media profiles, to build a more comprehensive view of an applicant’s financial health.
Machine Learning: Advanced machine learning algorithms analyze vast datasets to identify patterns and trends, aiding in predicting an applicant’s likelihood of default or delinquency, and their propensity to pay
Fraud Detection Services: To combat potential fraud in auto loan origination, lenders employ specialized services that flag suspicious applications and activities.

Identify Potential Auto Loan Fraud with Decisioning

Auto loan origination fraud is a persistent challenge in the industry. Fraudsters employ various tactics to secure loans they have no intention of repaying, resulting in financial losses for lenders. Fortunately, advanced decisioning systems equipped with fraud detection capabilities are instrumental in identifying and mitigating such risks. These systems analyze multiple data points to flag inconsistencies, suspicious behavior, or potentially fraudulent applications.

The Evolution of Auto Financing

The automotive industry has undergone a remarkable transformation since the days of the Model T, priced at a modest $850, equivalent to approximately $20,000 in today’s currency. During that era, financing became a necessity, as few individuals had such substantial sums readily available. Recognizing the opportunity, companies like GM and Ford swiftly established financing divisions, not only boosting car sales but also diversifying their revenue streams—a stroke of genius!

For a century, auto dealerships held sway in the auto lending domain, facing minimal competition beyond their peers. Buyers would stroll onto the dealership lot, engage in negotiations over lukewarm coffee, haggle over sticker prices, and drive off in a new car, savoring the scent of fresh upholstery. Trade-ins and financing were mere formalities in the car-buying ritual.

However, as time progressed, winds of change began to sweep through the industry, reshaping the dynamics of auto financing.

The Rise of Informed Consumers

In today’s automotive financing landscape, consumers wield an unprecedented amount of information. As the saying goes, knowledge is power, and this newfound knowledge empowers buyers while challenging the traditional balance of power in the auto lending domain.

This scenario parallels a scene from Game of Thrones, where Lord Petyr “Littlefinger” Baelish engages in a tense exchange with Cersei Lannister. In this dialogue, “Knowledge is power” is asserted by Baelish, but Cersei counters with a simple yet profound statement: “Power is power.” This mirrors the contemporary auto lending dynamic, with buyers armed with knowledge seeking to assert their position in the auto financing realm.

Disrupting the Status Quo

Waiting around at a dealership in order to complete financing paperwork can be tedious. And consumers these days aren’t content to wait around for long. But when consumers express dissatisfaction with an industry, it creates an opening for innovative businesses to disrupt the status quo. Hence, competition in auto financing is growing, and dealerships are working harder than ever to secure financing alongside car sales.

The Future of Auto Finance

A peek into the future of auto financing reveals a landscape where financing can be secured with a simple click, and a new car can be delivered to your doorstep within hours, bypassing the need to set foot in a dealership.

Threats to the Dealership Finance and Sales Process

Direct Lending: Direct lending has become commonplace and competitive, challenging traditional dealership financing.
Aggregators: Aggregator platforms are offering transparency to buyers while streamlining the often cumbersome paperwork for dealers.
Online Upstarts: Digital platforms are emerging, catering to customers who prefer an online experience over visiting a dealership.
Brands Entering the Game: Car manufacturers themselves are testing the waters with direct-to-consumer financing.

However, amidst this evolution, one constant remains—the importance of technology in enhancing both business and customer experiences.

Relationships That Stand the Test of Time

In a world where relationships are the key to longevity in lending, dealers must treat their customers as equals. The hard sell, lengthy application processes, and delayed approvals no longer suffice. Customers have alternatives, and they won’t wait.

To retain their throne in auto loan origination, dealerships must offer an experience that aligns with customer expectations. In today’s digital-first world, this means a seamless and competitive experience that values the customer’s time and understanding.

Seamless Experience:

Streamlined Process: The finance process should be quick and easy, with minimal paperwork.
Rapid Decision-Making: Technology-driven decisioning can process applications in milliseconds.
Customer-Centric: Show customers that their time is valued by going the extra mile to simplify the process.

Competitive Pricing:

Industry disruptors offer personalized pricing based on advanced risk models.
To compete, dealerships need technology that provides quick decisioning and accurate, risk-based pricing.

The Future of Auto Loan Origination:

The story is far from over, and the throne is up for grabs. The winner will be decided by who provides the superior experience—dealers or disruptors. The battle for buyers’ attention is likely to continue, with custom

Discover how to drive a better consumer experience in auto financing

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QUESTIONS

FAQs on Auto Loan Origination

Get in Touch

How has fintech transformed auto loan origination?

Fintech innovations have streamlined the loan origination process, making it faster, more efficient, and data-driven.
What role does data play in auto loan origination decision-making?

Data is crucial for assessing creditworthiness, detecting fraud, and personalizing loan terms for borrowers.

Are traditional dealerships still dominant in auto financing?

Traditional dealerships face growing competition from online lenders and fintech disruptors in the auto financing industry.
How can dealerships adapt to the changing landscape of auto loan origination?

Dealerships can thrive by offering seamless, technology-driven experiences and competitive pricing to meet customer expectations.

LATEST BLOGS

Canadian Lenders Association Risk Roundtable

Written by Allison Karavos on April 12, 2023. Posted in Resource, Webinars. No Comments on Canadian Lenders Association Risk Roundtable

ON-DEMAND WEBINAR

Canadian Lenders Association
Risk Roundtable

Book a Meeting

Featuring Cheryl Woodburn, Country Manager of Canada, Provenir

At the Canadian Lenders Association’s recent Risk Roundtable, Provenir’s Country Manager of Canada, Cheryl Woodburn, had the opportunity to discuss current challenges in growing your lending business, the ever-growing issue of fraud, and why accessing the right data is more important than ever.

Despite ongoing macroeconomic challenges putting significant stress on lenders, there are opportunities for growth in Canada. But to effectively take advantage of those growth opportunities, lenders need to look carefully at their data.

Watch now and hear from Cheryl on how data can improve your business agility, how to overcome common obstacles on leveraging data, and tips to more successfully action it.

RESOURCES

Infographic: The Benefits of Unified Access to AI-Powered Decisioning + Data

Written by Allison Karavos on October 30, 2022. Posted in Resource, Uncategorized. No Comments on Infographic: The Benefits of Unified Access to AI-Powered Decisioning + Data

INFOGRAPHIC

The Benefits of Unified Access to AI-Powered Decisioning & Data

How to Get Smarter With Your Decisioning Technology

How can you get smarter with your risk decisioning? Look for an all-in-one solution that functions like a smart home – one centralized platform that allows you to manage and control it all: data, AI models and decisioning.

Browse the infographic below for more info on the benefits of unified access to AI-powered decisioning and data.

Ready to get even smarter?

Get the eBook and discover how a unified solution can help you change the way you think about your risk strategy.

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Loan Origination Software Plays Its Part in Banking’s Digital Transformation

Written by Allison Karavos on August 29, 2022. Posted in Blog. No Comments on Loan Origination Software Plays Its Part in Banking’s Digital Transformation

BLOG

Loan Origination Software
Plays Its Part in Banking’s Digital Transformation

Loan origination — and, subsequently, loan origination software — is at an interesting intersection right now.

At a less institutional level, peer-to-peer lending is expected to grow at a CAGR of 53% between 2016 and 2020. But as lending technology matures, its impact could reduce profits in American banks by $11 billion per year, or roughly 7%.

This evaporation of margins is not a new problem for banks, though it is one that is increasingly disconcerting. In 2012, for example, the share of risk and compliance within general banking costs was 10%, a large portion of overall costs as they were. In 2017, risk and compliance are expected to consume 15% or greater. While costs are rising, it’s hard to actually mitigate risk with incremental risk management improvements. In large part, return on equity in banking often resides below the cost of capital, impacted by capital building projects and fines.

The result: to see increased growth into the next decade, banks are digitizing more processes. This has begun to happen, but a variety of studies — including many on millennial bankers — shows the digital transformation of financial services has not yet fully arrived. Since lending is a huge revenue source for banks across virtually all segments from small business to enterprise, making sure digital loan origination is properly executed is preeminent for many banks now.

As McKinsey has noted, the shift to increased digital transformation focus in financial services came about because of five distinct pressures (paraphrasing here):

Changing customer expectations: Consider the rise of mobile and on-demand experiences.
More regulations and risk-function effectiveness: Seen in increased regulations in most first-world economies, as well as more fines being dealt since the 2008 crisis.
Data management and advanced analytics are hallmarks of competitive banks now: Buzzword or not, we are living in a Big Data era.
Disruption: Risk management programs are essential for banks to compete with upstarts — if the upstart makes a big bet and misses, the established bank can favorably reposition.
Increasing pressure on costs/returns: And as noted above, risk management doesn’t necessarily deliver in this way on the balance sheet.

As such, rapid-fire, on-demand loan origination programs and software have begun cropping up in the financial services world. Why? When risk decisions are made in seconds, loan origination cycles shorten for the customer. Shorter cycles create positive customer experiences, brand loyalty, connection to the bank and its relationship managers, and continued business. Speed can be good.

But, banks attempting a new approach to loan origination need more than speed. While quick risk decisioning and credit scoring is crucial, a loan origination software program also needs:

The ability to process both structured and unstructured data: This would allow for the incorporation of both standard and alternative decisioning, i.e. credit documents vs. items from a loan applicant’s blog.
Compliance: Perhaps the most important at the bank level, compliance calculation and True in Lending Act (TILA) disclosures need to be compliant, and documents must be in compliance with the Electronic Fund Transfer Act.
“Look for initiatives within easy technological reach:” That’s advice from McKinsey above, and it makes good sense. Some loan origination software barely requires advanced coding anymore, so your IT side can work on more value-add internal projects.

There are other considerations such as ease to operationalize risk models that should be deployed.

Financial services, and especially loan origination have long suffered from a lack of transparency and simplicity. It oftentimes seemed that financial services firms were underserved by technology, or “square-peg/round-holing” the problem. That’s not the case anymore, and loan origination software and approaches are of huge value for established banks as a way to drive a growth culture forward. The crucial step is the right partner for your specific needs.

LATEST BLOGS

Loan Origination in the Golden Age of Instant Everything

Written by Allison Karavos on August 25, 2022. Posted in Blog. No Comments on Loan Origination in the Golden Age of Instant Everything

BLOG

Loan Origination in the Golden Age
of Instant Everything

It may look like the golden age of “instant.” The casual iPhone user can get an Egg McMuffin delivered to their door while it’s still steam-hot in the bag. The average Twitter user can use their ampersand key to swat through a brand’s customer service obstacles like Arnold Schwarzenegger cutting through the jungle in Predator. It may look like we’re in the golden age of immediate-results technology, but we’ve only just reached the earliest, primordial stages in its existence, and consumers have already and instantly adjusted to the instant age.

As the world of apps grows, consumers have, and will, expect every corner of our daily lives, especially the institutions that manage our financial loans or our medical information, to be as cloud-efficient and scalable as the app that schedules an undergrad to walk your dog while you’re in a meeting. Technology tends to evolve inwardly and sensitively, finding it’s way into our banks and homes–not broadly and impersonally. Notwithstanding, loan origination systems are a deeply personal technology.

As a microcosm-example, a 2016 piece in Forbes summarized that brands who engage in direct customer service via Twitter see a 19% increase in customer satisfaction. Loan origination is one of life’s sensitive areas–vulnerable like our medical information or mortgage payments–that needs to adapt to this instant-evolution.

Picture the expectations of instant response when we have an artificially intelligent platform accessible from a contact lens. How long do you think a customer will tolerate waiting for approval or a green “success” check or a loan when all of the technology around us has already reached the speed and accessibility only dreamed up in Ray Kurzweil novels?

Waiting, whether for your breakfast sandwich or your loan decision, is as a dead and dusty a concept as your CD-RWs. Instant technology that learns for the individual and can execute in real time is the present and future. We’re already expecting banking to happen in the blink of an eye. In the future–especially in light of the cascading failures in recent financial technology–it will need to happen even faster, more efficiently, and securely.

Deploy Machine Learning in Your Financial Institution Rapidly

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SME Lending: The Road To Real-Time Approvals

Written by provenirmulti on July 13, 2022. Posted in Resource. No Comments on SME Lending: The Road To Real-Time Approvals

SME Lending: The Road to Real-Time Approvals

How to Build World-Class SME Lending Experiences

Thirty-two percent of SMEs now work with online lenders for business credit. Convenience, efficiency and the ability to get rapid approvals make working with digital lenders an obviously attractive choice. If you aren’t making it easy for SMEs to get the credit they need, your competitors will.

Discover how to:

Power quick and easy applications
Automate processes for real-time approvals
Lower the cost of loan origination
Use predictive analytics to keep risk in check

Check out the eBook and learn how to accelerate your SME lending and pave the way for world-class lending experiences.

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