ParsTasmim Loan Processing

Loan Processing Solution for Financial Institutions

Introduction

The growing complexity of the business environment for financial services organizations presents new business and technological challenges. Industry consolidation, increasing regulatory requirements, concerns over security and privacy, the need to manage profitability and control expenses, and competitive pressures from traditional and new providers are driving financial services organizations to automate their complex business processes to increase operational efficiency, ensure customer loyalty, deliver superior product quality, and maintain their competitive advantages.
The banking industry is experiencing new levels of regulatory scrutiny, rapid consolidation and increasing customer expectations. These factors are driving banks around the world to find ways to more effectively manage varying volumes in business while reducing costs in the critical area of loan processing in order to protect their margins.
For most banks, loan processing—whether for credit cards, home mortgages, personal loans and/ or vehicle financing—is a labor-intensive, paper-based and compartmentalized sequence of tasks. As such there is tremendous potential value in streamlining this area of their operations. However most banks have been unable to realize this value because their IT infrastructure is too inflexible and disconnected for them to coordinate the assets, information and activities that make up the processing of a loan.

Need For Automation

The challenge for banks and financial institutions is to create delivery economics far superior to those of competitors, and at the same time offer consumers much greater convenience. This would entail working on:
Better customer relationship by providing new products and prompt services
Maintaining a lean workforce and cutting down costs for physical infrastructure in setting up new branches
Lower transaction processing and monitoring costs by centralization of operations
Improving the efficiency as well as productivity of each process and every employee

In order to service customers better, banks and FI’s need to expedite the start up time to set up operations for a new branch with minimum investment. Also, as the number of branch offices increase and more customers approach for services, the processing time of the application will get affected. Physical documents need to be transferred from branch offices to Central office. At times this method of document transfer can prove to be risky and time consuming. Moreover for processing some special cases in case of high value Bills; advice of specialist is needed, which often is difficult to get at the branch offices. In such a scenario, Individual’s productivity and process capability are difficult to measure and hence companies are looking at harnessing the advantages of IT to improve upon process time and better control over the processes.

The Problems

Time – Sanctioning of Loan can take anywhere between 2-4 weeks depending upon the number of discrepancies.
Control – It is difficult to collate the information and standardize processes across geographic locations.
Monitoring – It is difficult to monitor the status of transaction because the files/documents can be lying on any of the officer’s desk.
Lower Customer responsiveness – The front desk people are unable to answer to the client queries regarding when the Bills will get sanctioned, what is the problem etc

ParsTasmim BPM Solution for Loan Processing

technology that provides process intelligence. Only when an organization can gain true end-to-end visibility into the performance of its most important business processes can it leverage automation technology to meet its objectives.
Pars Tasmim in partnership with Global 360 offers a proven solution that can help banks of all sizes reduce their loan processing costs by coordinating loan processes across channels, departments and systems and improve the efficiency and adaptability of their loan processing activities.
Pars Tasmim's BPM solutions enable financial services organizations to link goals to execution, engage in dynamic planning, automate processes, and monitor systems; providing management with the visibility and insight needed to make sound and timely decisions that ultimately determine success.
This allows a lender to expedite a letter of credit more efficiently, distribute the workload of loan approval more effectively, and track every stage of the process from the moment off application to loan funding, even if multiple process technologies are involved in that end-to-end business process.
Using Pars Tasmim's BPM solutions, financial services organizations gain the following benefits:

Solution Benefits

Through the automation of routine tasks, PARS TASMIM's solution can eliminate many costly manual activities and affiliated errors, which can dramatically reduce loan processing costs. By doing so PARS TASMIM's solution can improve profitability, support a higher volume of loans and improve customer satisfaction by reducing the amount of time they must wait for approval and funding.
The more consistent and controlled execution of loan processing activities enabled by PARS TASMIM's solution helps banks monitor and optimize performance so they can implement processes to ensure compliance with government and industry regulations, satisfy service level agreements with partners and customers, and continuously improve the efficiency and effectiveness of their processes.
By helping banks develop and introduce new products and services more quickly and at a lower cost, PARS TASMIM's solution can help banks identify new opportunities and increase revenues.

Areas of Improvement
Loan Origination

Despite some automated data capture at the front-end, the loan application process is still heavily paper-based. PARS TASMIM’s solution enables banks to automate the origination process through the application of rules-based processing. The tasks performed and information provided by third parties such as mortgage brokers, automobile retailers, credit-scoring bureaus and securitization agencies can be seamlessly incorporated into the process in real time, giving banks faster and more controllable lending processes. PARS TASMIM also allows banks to consolidate origination systems and deploy re-usable processes to support them.

Loan Servicing

Most banks have channel- and product-specific servicing systems that do not interact with each other. By extracting the process logic from these disparate systems, PARS TASMIM’s solution enables banks to manage their loan processes more efficiently and adapts their processes to changing requirements. By providing an infrastructure that can handle fluctuating business volumes, PARS TASMIM’s solution ensures that peaks in the business can be accommodated without negatively impacting the day-to-day performance of the lending operation.

The Impact of PARS TASMIM on Lending Processes
Single Process from Origination to Servicing

PARS TASMIM’s solution enables the coordination of the entire lending process, from loan origination, processing and closing to post-closing and servicing. The solution enables companies to manage lending processes as a cohesive and coordinated unit of work that brings customer-facing sales and service functions together with transaction fulfillment in the back office. Through the development of reusable components and process flows, PARS TASMIM’s solution enables the deployment of re-usable ‘best practice’ processes across the different product lines as well as tighter integration of origination and servicing systems.

Rules-Based Execution of Common Decisions

PARS TASMIM’s business rules engine enables users to capture and automate complex loan processing steps in order to ensure consistency and minimize the need for human decision-making.
Rules can be defined by the business user to replicate human decision-making in order to accelerate applications through the origination process and minimize exception handling situations. For example, a rule could automatically calculate interest rates based on customer credit scores.

Self Service Loan Applications

Web-based interfaces gives customers the ability to apply for loans with no human assistance, and gives brokers and customers alike the ability to track the status of applications on-line. They can also enable customers to perform a variety of account servicing actions themselves. PARS TASMIM’s solution gives banks the ability to extend these services to the Internet and other channels, and enables them to integrate activities across a variety of channels and financial products.

Focus Employees on the Exceptional, not the Expected

As PARS TASMIM's solution enables the ‘straight through processing’ of loan applications, transactions can move through the organization with little or no human intervention. This frees up time for knowledge workers to focus on the 'exceptions' or more complex cases that require more detailed analysis.

Performance Monitoring

PARS TASMIM's solution captures performance metrics throughout the execution of processes, providing an individual audit trail for every loan application processed. This enables banks to measure performance at all levels, from user level up to organizational level as well as across tasks and processes to identify process bottlenecks. By then tuning the process to address an organization’s specific needs, optimum process efficiency can be achieved.

Process Compliance

Regulatory initiatives such as Basel II and the Sarbanes-Oxley Act of 2002 are driving banks to have greater transparency in their business processes. By enabling once-only data capture at the front end and end-to-end process management from front-office to back office, PARS TASMIM’s technology automates and drives cross-departmental processes – allowing banks to manage risk more effectively by implementing appropriate alerts and audit trails to control and track these processes.

Financial Services Institutions Using Global 360 BPM Solutions

Key Benefits

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