Let’s look at a typical loan process.

Customers can visit a bank branch or apply online through various banks or loan aggregator sites and apps.

Traditional Loan Application Process

A customer wanting a car, personal, housing or any other loan walks into the bank’s branch for faster loan closure.

Example

Customer - “Hi, I want a car loan of Rs.200,000. How soon can I get it, and what is the interest rate?”

Bank Executive Officer - “Sure Sir. Please give me your details. I will ask our Auto Loan Sales Specialist to contact you right away.”

The customer shares the details and leaves the branch. The Loan Specialist contacts the customer for additional information to start the process which will determine the customer’s loan eligibility.

This interaction involves a lot of back-and-forth communication and significant paperwork until the loan is approved and closed. The traditional approach to loan application and processing has several challenges.

Challenges faced by Customers when seeking loans

  • Lack of information on -loan amount eligibility (CIBIL rating, bank’s internal score, profile-based score etc.)
  • Interest Rate applicable
  • Loan Tenure
  • EMI
  • Form Filling and KYC Documentation procedure
  • Time lag between loan application approval and disbursement

Challenges faced by Banks/NBFCs when initiating/closing loans

  • Manual collection of data
  • Human effort involved in customer co-ordination for each loan
  • Lack of real-time updates on the loan processing

Each loan undergoes an exhaustive approval process, which varies for existing and new customers. Many lenders today are not in step with the digitized world. They have slower response and decision times than what customers want, and also internal data management problems that add to their processing woes.

Quickwork’s Loan Automation solution helps automate the entire process - from loan application, loan eligibility to loan agreement and disbursement.
Let’s take a look.

For a Walk-In Customer | Assisted Loan Application Process

Example

Customer - “Hi, I want a car loan of Rs.200,000. How soon can I get it and what is the interest rate?”

Bank Executive Officer - “Sure Sir. Please give me your details and I will assist you with your application right now.”

Profiling (eKYC)

The first step in the loan process is Profiling. At this stage, the walk-in customer shares his details like - name, employer’s name, salary figures, address, phone number, PAN, loan type, and loan amount. The Bank Officer will fill in these details in an online Enquiry Form. This will trigger a request to CIBIL to generate an OTP on the customer’s registered phone number. The customer then shares the OTP with the Officer to enter into the form.

Loan Eligibility

The customer’s financial details and CIBIL score are run through the bank’s Business Rule Engine (BRE), which calculates the sanctioned loan amount, interest rate, tenure and EMI. The BRE is the brain in the loan eligibility process. For an auto loan, the BRE can calculate the loan eligibility based on the car make and model and new or used (pre-owned) car. It contains the business logic and rules defined by the bank to assess and determine the loan variables.

If the walk-in customer is eligible for the loan, he will receive a notification containing details of the sanctioned loan. If he is not eligible, he will receive an update on this status immediately. Alternatively, if a lower amount, higher interest rate or higher tenure is possible, based on the BRE, the same will also be conveyed. This information is also sent to the nearest Loan Specialist based on the customer's preferred location of visit (residence or office), which is geo-tagged based on the address provided during profiling. A Loan Specialist will contact the customer to confirm if he wants to take the loan or if he wants to discuss it further.

Loan Agreement

Once the customer gives the go-ahead, the loan agreement is drafted, and a Bank Representative visits the customer to get the loan agreement signed and activate the loan.

For an Existing Customer | Online Loan Application Process

An existing customer can directly query the bank for a loan using the chatbot. Considering the bank already has the customer’s profile (eKYC) details, the Enquiry Form is partially filled with the available information. This triggers a request to CIBIL to generate an OTP on the customer’s registered phone number, which the customer shares on the chatbot.

Loan Eligibility

The existing customer’s financial details and CIBIL score are run through the bank’s Business Rule Engine (BRE). Additionally, the bank also checks to see if the customer has defaulted on any payments in the last 3 months. The sanctioned loan amount, interest rate, tenure and EMI are calculated accordingly. The procedure for notifying the customer and signing the loan agreement is the same as for a Walk-In customer.

This solution integrates the Quickwork platform with Core Client APIs, a Messaging Platform, Google Dialogflow (NLP engine), and Tap2Talk (Tripartite Communication app).
It can also use -

  • Messaging apps like Facebook Messenger, Google Talk, LINE etc.
  • Mobile/Web Browser/Existing Bank app
  • CRM or Ticket Management Systems to maintain requests/complaints

The NLP engine plays a critical role in analyzing and interpreting the meaning, context and intent of the customer’s message. It understands the message typed in natural language and responds with a suitable answer in English, Hindi or any chosen language.

Loan Automation Features

Loan Automation is beneficial to Banks/NBFCs in the following ways -

  • End-to-end automation of the entire loan process with customizable and add-on modules based on the bank’s existing process
  • Integration of the front-end process with the Business Rule Engine
  • Ability to replicate LOS and LMS flows or combine other value-added features without disrupting core system functionality
  • Captured leads/data can be pushed back to the bank’s CRM and reporting system for real-time updates
  • Increased speed, efficiency, productivity, and responsiveness for higher customer satisfaction and retention
  • Time, effort and cost savings in operational processes
  • Adherence to stringent regulatory requirements consistently

Quickwork’s Loan Automation solution is the new-age approach to providing a seamless loan experience to your customers.

To explore this solution for your business teams, contact [email protected] and [email protected] for details/demo.