Financial lending businesses are arguably some of the riskiest businesses to run in 2021. As transactions are getting increasingly impersonal and digitized in nature, lenders need to be even more precise, calculative, and cautious while accepting applications, processing them, and providing funds to the borrowers.
Moreover, a financial lending company today is required to process the applications at a much faster rate. Especially if you are providing business loans and advances, gone are the days when your clients would happily wait for their applications to be processed for weeks and months. Borrowers need their answers faster or they would easily move on to the next best alternative.
Both the issues of conducting secure financial lending transactions and speeding up the loan processing activity can be resolved by making use of the OCR (optical character recognition) technology. Simply speaking, this technology scans the details of specific documents (physical or digital), extracts all relevant data, and feeds it within your system. When you use a document scanning software platform, you no longer need your employees to keep moving loan applications from one person to another. A simple scan would do the job for you.
The best way to use OCR technology in the field of financial lending is to couple it with machine learning to make sense of the data extracted and help you make important decisions about going ahead with your transactions.
Three of the major benefits of using the OCR technology for leveraging your financial lending processes include:
Precise Identity Verification
Especially when you are conducting impersonal transactions, it is extremely important for a lender to verify the identity of a borrower to prevent the threat of identity theft. When you use the OCR technology coupled with machine learning algorithms, you can scan all the identity proofs received from the borrowers, look for the standard patterns, and match the same with the official records to verify the identity of the concerned borrower.
Bank Statement Analysis
Effective bank statement analysis allows a lender to have a look into the borrower’s bank transactions, understand their income and spending trends, and ensure that they are able to maintain a decent balance at the end of every month to be able to make regular repayments.
Traditionally, it takes a much longer time for your employees to go through the bank account statements of a borrower manually and drawing conclusions. A document scanning software equipped with OCR technology would scan all the pages of the concerned statements and provide you with a holistic summary in a few seconds.
Analyzing Financial Statements
When it comes to providing business loans, a lender needs to assess financial statements like the Balance Sheet and the Profit and Loss Statement of the borrower to understand their current financial standing and their history of making profits/handling assets and liabilities.
OCR scanning of these statements saves you a substantial amount of time in going through every row and column of the financial statements and coming up with a final decision. A simple scan will provide you with all important information regarding the revenue earned, expenses incurred, capital generated, assets possessed, and liabilities owed by the borrowing company.
The Final Word
Summing up, it is advisable for financial lending companies to make the much-needed switch from traditional lending techniques and adopt newer technologies like OCR and machine learning. This would help you provide faster and more efficient services to your borrowers, along with making sure that all your transactions are carried out in the most secure way possible.
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