Addressing the Lending Compliance “Gorilla in the Room”
Compliance has always been a headache in modern lending, but increasing regulatory scrutiny is becoming a breaking point issue for some financial services organizations. Every step of the loan operations process can involve navigating disclosures, verifying information accuracy, and backtracking to confirm 100 percent compliance before closing. These processes aren’t just tedious – they’re nerve wracking. No lender wants to fail an audit or cost their institution a fortune in fraud and regulatory fines.
The regulatory burden for lending can feel endless, resulting in ballooning loan origination costs and increased delays throughout the origination process. And in addition to navigating these byzantine state and federal rules, lending teams are also tasked with successfully:
Managing an intense volume of paper documents in a world that is increasingly digitized
Implementing fraud and verification practices to fight financial crime
Providing borrowers with a modern lending journey that accommodates their timetables and keeps them informed of their loan status
Attracting and retaining top talent through an efficient workplace that assigns them meaningful work instead of manual, repetitive tasks
Risk is one part of the equation; another is cost. Ongoing regulation changes mean rising change management costs. So do fraud prevention and other initiatives. Hiring more and more headcount to carry out these objectives just isn’t a feasible solution, as it cuts into revenue.
No doubt, compliance is a high-stakes game. But some lenders are transforming their compliance struggles with technology, leading not only to easier compliance for themselves, but a better experience for their customers. They’ve discovered that modern financial services organizations need modern tools – and these tools determine who will succeed in tomorrow’s lending landscape.
4 Essential Tools for Smarter Lending Compliance
1 Digitized data capture and compliance tools
Lenders who can translate manual processes into scalable, standardized, and automated processes gain a marked competitive advantage. Not only does automation accelerate time to revenue, but it also reduces customer frustration and redirects staff efforts to more value adding tasks. Ultimately automation removes the friction from compliance through digitized, streamlined processes that guarantee the lender’s data usage complies with regulatory and lending laws.