Credit Origination: How to bring agility and flexibility to your origination process

Credit Origination: How to bring agility and flexibility to your origination process

The culture of credit lending has been in existence from time immemorial. With the onset of the millennial era, the loan process has become an integral part of the modern banking system contributing majorly to the economy. In current times credit origination is designed for efficient loan processing, which will offer an end-to-end solution in terms of the complete loan cycle, credit analysis process, risk mitigation, and ensure that the entire procedure is in complaint with all legal policies and regulations.

The credit origination process is a complex affair that involves an elaborate set of processes namely customer onboarding, know your customer (KYC), loan proposal, document management, cashflow analysis, multi-stage approval, disbursement schedule, loan contract, loan sanction, and the disbursement. It is important to streamline the process to ensure that all the stages involved in loan processing are carried out without any hassle, thereby, offering a seamless experience to the customers.

As credit systems are becoming a central part of today’s banks/ financial institutions, the need for an advanced software solution is increasing. To ensure that the software system of the credit workflow and origination operate without any flaws, there is a need for a robust and agile testing solution for the process. The testing of the credit lending software will make sure that the entire process from loan initiation to completion work without any issue that will eventually help in customer satisfaction and retention.

Building agile and flexible credit process with future-proof solutions

The introduction of digitization in the banking/ financial sector has changed the credit lending process in the last decade and will have a similar impact in the coming years too. In order to adapt to the highly dynamic market and deliver customer-satisfactory solutions, it becomes important for the banks/ financial institutions to have an agile and flexible process that is future-ready. This is impossible without an advanced software system in place created with a strong SDLC framework, and not to forget the agile testing of credit origination platform.

Loan origination is not as a simple process as it may sound. It involves seven critical stages to complete the loan process, namely, pre-qualification, loan application, application processing, underwriting process, credit decision, quality check, and loan funding. Hence, the testing process requires system integration to support the process across all these stages and channels.

An array of features for creating an agile credit process

Integrated credit system and risk management: Banks and financial institutions have embedded credit policy guidelines to align with the regulation and help in risk mitigation. This helps in staying compliant with the changing regulations of the credit origination process and improves the risk calculations. Further, helping organizations to improve the profit margin with better credit analysis and reduced faults on loan.

Designing responsive systems: Credit lending is a highly complicated process in the banking/ financial sector. To ensure effective customer service, it is important to build a responsive system that can process repetitive, mundane jobs and ensure accuracy and complete customer satisfaction. 

Mobile optimized solutions: With the increase in the number of smartphone users, loan origination is slowly moving towards an app-based interface. Mobile apps offer a great deal of advantages like on-the-go document submission, information capturing, real-time monitoring, easy approvals, and document reviews.

Performance and quality: Performance of credit origination platform drives system efficiency and strong customer service. To, further, support the performance of the real-time services for accessing the loan documentation, financial spread sheets, and the core loan processing system, an agile QA methodology is required to find out any faults in the software and ensure the system is working at its best in terms of quality and performance.

Integrated audit trails: Integrated audit trails are introduced to aid the compliance of the process. This also allows checking the loan-to-value, pricing, and coverage ratio in the credit process.

Testing of loan origination software

Originating credit is the lifeblood of consumer banking.  LOS (Loan Origination System) systems allow banks to rapidly scale while bringing in standardized processes.  To compete with FinTechs, banks need to constantly tweak their origination workflows and scoring engines.  To ensure flawlessly working LOS and LMS (Loan Management System), banks and financial companies are investing hugely in the right software testing tools. The testing aspect of the process covering functional testing that involves user acceptancesystem integration and regression testing of credit origination platform, and non-functional testing involving security and performance testing.

Test automation solution with AI-integration is getting popular among the banks/ financial institutions to remove bugs, mitigate risk, and help the lending banks and borrowers. Any discrepancies in the LOS or LMS can create high risk scenarios and lead to huge loss on money while hitting the reputation of the company hard. Hence, it is crucial to have thorough testing of the credit process to ensure a perfectly working system.

Why Yethi for the testing of loan origination process?

Yethi has a successful past of offering testing solutions to a wide range of banking and financial processes; one of the popular testing solutions is for the credit lending process. We understand the complexity of initiation, procession, and management of credits and the highly sensitive client data involved in the process, therefore, we offer automated testing solutions to help you operate the entire process easily and smoothly. Yethi helps you with the automation testing lifecycle of the entire loan process. It involves an elaborate origination, servicing, and collection process at various stages, helping you find out even the minute error in the system. We are your perfect QA partner as we carry out multiple rounds of execution to ensure accurate testing results. We carry out thorough analysis and testing to achieve specific, measurable, achievable, realistic, and timely results.