Financial services industry for innovation: Loan origination

Financial uncertainty is testing banks as unease remains over the possible spillover effects of recent bank runs. But amid intensified scrutiny, banks can’t lose sight of customers’ rising service expectations and how they affect their ability to attract and keep accounts. Even as they face growing pressure and market uncertainties, they must continue to lower costs, speed up operations, identify new revenue opportunities, and remain competitive in a regulated and data-intensive environment.

Loan origination is a strategic area where IT investments can position banks to give customers a better experience, uphold fiduciary responsibilities, and better manage resources. Banking institutions that adopt innovative cloud infrastructure and services can integrate data from various sources and translate that data into actionable insights in lending.

Using automation in banking

In today’s competitive lending market, banks that effectively use data to automate and drive decisions are best positioned to win customer lending relationships. Alternative finance firms are increasingly eating into traditional lending businesses, spurring banks to remodel credit decisions and transform lending originations to remain competitive. Automating credit decisions and pricing is key to achieving speed, scope, quality, and scale in originations. Banks can generate accurate credit decisions and competitive pricing more quickly to support a wide scope of lending products.

Oracle Banking Origination Cloud Service helps reimagine originations by driving a personalized, consistent, and frictionless experience with the customer at the center. The software as a service (SaaS) helps bankers provide tailored onboarding and originations for customers’ accounts, deposits, loans, and credit cards with speed and transparency. For example, bank employees can easily visualize data with geographical mapping to explore and analyze loans across the country to spur growth.

Lenders can act on data and offer new customer services with Oracle solutions. Oracle Autonomous Data Warehouse enables financial institutions to compile all their data into a single, easily accessible database with no IT administration. Oracle Analytics Cloud helps lenders better understand individual loan performance and broader trends and predict loan performance at the micro and macro levels to better plan for growth. Oracle Analytics provides easy-to-use geographical mapping features for teams to quickly visualize, explore, and analyze loan data across regions. With Oracle MySQL HeatWave, companies can run artificial intelligence (AI) and machine learning (ML) algorithms on a real-time basis with no downtime to offer improved customer experiences, such as instant loan apps.

A real-world use case

Pathways Financial Credit Union is a not-for-profit, full-service financial institution that provides services to 50,000 members across a breadth of products including business loans, personal loans, and mortgages. As Pathways expanded its services into more complex products, it needed to analyze business performance information from multiple data sources. The organization needed a better data management system that allowed non-technical staff to easily compile various sources into a single database to generate actionable intelligence.

Business analysts at Pathways use the highly intuitive Oracle Analytics Cloud to better understand individual loan performance, trends, statistics, and predict loan performance, both at the micro and macro levels to better plan for future growth. Oracle Analytics also provides easy-to-use geographical mapping features for Pathways staff to quickly visualize, explore, and analyze loan data across the country. The company can now take the new insights and expand its approach to reach more customers.

“The reason we moved to Oracle Autonomous Data Warehouse was so that we could compile all our data into a single, easily accessible database with no IT administration,” said Curtis Onofri, chief lending officer for Pathways Financial Credit Union. “Then we use Oracle Analytics Cloud to better understand the loan performance, trends, and statistics for actionable insights much faster than ever before. Now, we can better plan and prepare our company for future growth.”

Want to know more?

To learn how banks can accelerate the account opening and onboarding process, improve abandonment rates, and meet modern day customer expectations, watch the replays of Oracle’s financial services industry demos.

This article is part of a series on cloud-enabled innovation in the financial services industry. Check out related editorials on account opening and onboarding and credit card transaction anomaly detection.