Key features and benefits of the best lending automation software


How to Choose the Right Lending Automation Software for Your Business

The market for lending is changing across the globe. Most digital lenders are turning their attention to emerging markets and competing for traditionally underserved, down-market customers. In order to compete in the fast-paced financial market digital lenders must rethink the lending process. Loan management software that significantly simplifies the management of processes is a critical business solution for lenders. A lot of criteria must be taken into account when selecting the best lending software provider. 

In this post, we based on our many years of experience to develop and exploit loan management systems for financial companies consider the main criteria for choosing the right lending software.

Table of Contest

What Is Lending Automation Software?

How Lending Automation Can Enhance Your Business

Types of Lending Automation Software

Features & Key Features

Common Problems to Look Out for When Using Lending Automation Software

How to Select the Right Lending Automation Software for Your Business


The market for lending is changing across the globe. Most digital lenders are turning their attention to emerging markets and competing for traditionally underserved, down-market customers. In order to compete in the fast-paced financial market digital lenders must rethink the lending process. Loan management software that significantly simplifies the management of processes is a critical business solution for lenders. A lot of criteria must be taken into account when selecting the best lending software provider.

In this post, we based on our many years of experience to develop and exploit loan management systems for financial companies consider the main criteria for choosing the right lending software.

What Is Lending Automation Software?

Lending automation software is a tool that helps businesses manage their loan processes. It offers a fast processing mechanism and eliminates the need for paperwork or personal contact. It helps to optimize the lending system by quickly identifying applications that meet the lending criteria, effectively guaranteeing fast financing of the loan. It also increases the overall accuracy of decision-making. In addition, the automated loan management system offers better security features as well as a 24/7 online support system that brings a new concept to loan management.

According to Verifier Market Search Loan Servicing Software Market was valued at USD 2 Billions in 2020 and is projected to reach USD 4 Billions by 2028, growing at a CAGR of 12.19% from 2021 to 2028.

Some might suggest that the financial sector has too many risks and hidden pitfalls to hand over control to automated software. But now digital lending platforms are being created so qualitatively that you will not only not lose money, but also multiply it a lot. After all, you will automate a large number of processes and significantly reduce your time and that of your customers.

How Lending Automation Can Enhance Your Business

If you’re looking for a way to streamline and improve your lending process, then you need to consider Lending Automation Software. With this powerful tool, you can automate just about everything from the initial application to the final decision.

This means that you’ll experience a number of benefits, including:

 Reduced processing time: The time it takes to get a loan approved and funded will be drastically reduced with the help of automation.

Increased accuracy: Automated systems are far more accurate than humans, meaning that fewer loans will be rejected and more money will be lent out.

Improved customer service: By automating the process, you’ll free up your staff to provide better customer service.

Increased efficiency: Automation will make your entire lending process more efficient, resulting in improved profits for your business.

Types of Lending Automation Software

There are a few different types of Lending Automation Software on the market. Here are the most common ones:

1) Loan Origination Software: This software helps you process and underwrite loan applications. It includes features like credit analysis, automated decisioning and document management.

2) Loan Servicing Software: This software helps you manage your loans after they’ve been originated. It includes features like payment processing, debt collection and account servicing.

3) Loan Marketing Software: This software helps you market your loans to potential borrowers. It includes features like lead management, marketing automation and credit scoring.

4) Loan Aversion Software: This software helps you avoid bad loans by identifying borrowers who are at risk of defaulting. It includes features like credit risk assessment, fraud detection and collections management.

Features & Key Features

When you’re looking for lending automation software, it’s important to understand the key features that are available.

Functionality of automated underwriting  

Credit is at the heart of most customer relationships, and digitizing it offers significant advantages to banks and customers alike. For the bank, successful transformations enhance revenue growth and achieve significant cost savings.

Fully digital processing

The digital lending platform allows you to quickly issue a loan with zero paperwork and no face-to-face interaction. Faster loan approvals and releases will reduce the “time to yes” from weeks to minutes – this will provide you with a constant flow of satisfied customers and a lower cost of loan processing.

CompassWay is an all-in-one lending platform that automates the loan origination process from application to funding, delivering a best-in-class experience for your clients and team – for any loan product. With advanced algorithms and analytics, banks can quickly score clients and automatically make credit decisions.ct, anywhere in the globe. By reducing time and costs both during the origination and portfolio management stages, a bank or credit union becomes more productive and has more room to develop new business.

Real-time checks: ID verification, Know Your Customer (KYC), Anti-money laundering (AML), credit history 

Digital lending software is equipped to synchronize data from KYC registries, credit bureaus, banks, etc. to ensure that all uploaded data and documents are authenticated. Decision rules and underwriting algorithms are then used to determine whether the loan application passes the checks and balances of risk.

Increased automation and strong back-end technology enable staff to be redeployed from reviewing loan applications to work that adds more value.

Real-time risk profiling 

Risk management is a most important aspect of a digital lending platform. The capacity to mitigate credit risk will prevent costly losses and preserve credit availability for deserving borrowers who will become or remain active participants in the economy.

The digital lending solution should give you real-time insights into borrowers’ creditworthiness based on their credit scores.

It‘s also crucial to have a customisable scorecard based on recent cash flow information, total debt level, repayment history and other factors. Here, you can see CompassWay’s scorecard:

CompassWay’s scorecard for new clients

Both internal and external data sources are used in a credit decision model and have an impact on the quality of credit decisions. The use of objective financial information and other factors proved to correlate with risk allows for increased consistency across each company’s lending underwriting process. The use of risk-based pricing has allowed lenders to better serve consumers across the risk spectrum. Under this system, costs are lowered for the majority of consumers who are deemed low-risk, while credit opportunities are expanded for higher-risk consumers. Risk-based pricing also creates a fairer marketplace.

With the help of artificial intelligence (AI and ML tools), financial companies can better identify specific variables to define new customer segments, create segmentation rules, build and validate dedicated scoring models, and improve predictive power. The proprietary AI-driven technology of deep neural networks and machine learning allows making decisions about loans within 30 seconds. CompassWay’s AI model analyses over 400 variables collected during the application process and sourced from third parties – ranging from credit bureaus to social networks.

 Automate Marketing and Client Loyalty Program

A strong digital lending platform should provide you with critical analytics to help you make informed decisions. For example, the platform should provide you with information about client acquisition channels, time applying for loans or cross-device tracking. These insights assist you in identifying and correcting issues in your onboarding process in order to attract more qualified borrowers to your financial institution.

The digital lending platform should help you with getting return customers in your bank or credit union. CompassWay’s digital lending platform displays personalized loan recommendations to existing borrowers to expand the possibilities of making them repeat customers.

Notifications, SMS, email, or personalized nudges — provide your marketing teams with the tools they need to create targeted campaigns and outreach that engage customers and members, resulting in long-term loyalty and stickiness.

The digital lending technology also makes perfectly clear loan applications for return customers by automatically pre-filling forms with existing client information. The result is improved customer experience and a higher retention rate. Orchestrate your digital sales funnels to guarantee the relevant questions, steps, and experiences are presented to your customers at every digital touchpoint.


Common Problems to Look Out for When Using Lending Automation Software

When considering which automation software is right for your lending business, it is important to be aware of common problems that can arise. These may include poor customer support, slow loan processing times, and unreliable data management.

Poor customer support can mean that you don’t get the help you need when you need it most, while slow loan processing times can lead to customer dissatisfaction and lost revenue. Unreliable data management can cause confusion and errors in your internal processes. To avoid these issues, make sure to look for a provider that offers robust customer service, fast loan processing speeds, and reliable data management.

When you’re automating your lending processes, it’s important to be aware of the risks involved. Automation can speed up the process and help you make more accurate decisions, but it’s not foolproof. In fact, automation can lead to some common problems if you’re not careful.

Here are a few things to watch out for:

– Fraud: Automated systems can be fooled more easily than humans, so it’s important to have robust fraud detection measures in place.

– Errors: Automated systems are only as good as the data they’re working with. If your data is inaccurate, your loans may be approved or denied incorrectly.

– Bias: Automated systems can be biased based on the data they’re given. For example, if you’re only approving loans for people within a certain age range, your system may be biased against older borrowers.

– Overreliance on Automation: If you rely too heavily on automation, you may miss out on key information that could help you make better lending decisions.

One common issue that can arise with using lending automation software is loan portfolio management and regulatory compliance. If you’re not careful, you could be inadvertently offering loans to customers that don’t meet your bank’s criteria. And this can lead to costly fines and repercussions.

To ensure your loan portfolio is managed correctly, make sure the lending automation system you choose can generate reports on an ongoing basis to monitor your loan portfolio for both risk and compliance. Keep a keen eye out for any concerning trends or patterns so you can take quick action if any issues arise.

With the help of our platform, the lender can view all information about loans in the form of a diagram shown below:

CompassWay Dashbord shows information on applications


Make sure your system also has the ability to detect fraud, which could damage your reputation and put your customers’ data at risk. Your system should also have the capability to identify suspicious transactions and alert staff before they are approved. Finally, don’t forget about performing regular stress tests on the system itself to make sure it can handle all of these tasks without any problems.

How to Select the Right Lending Automation Software for Your Business

With all of the options available for lending automation software, it can be difficult to decide which one is best for your business. Essentially, a loan origination system’s purpose is to assist banks and other credit institutions in achieving their strategic goals. Before getting into any particular loan management software solutions, think about what’s most important to your organization?

What do you expect to achieve with your new software?

There are several factors to consider when deciding, including cost, features, and customer service.

Firstly, you should take a look at the cost of each option. If you’re on a budget, you may want to choose software that has a lower price tag but still offers all the features you need. On the other hand, if budget is not an issue, you can opt for more expensive software with extra features that might make it more attractive.

A free trial lets users experience the product first-hand, understand its functionalities and see if the product delivers the right value for them before buying.

CompassWay provides an opportunity to get acquainted with the product using a free trial period.

Next, take a look at the features offered by each software. Are there features that are essential for your business? Are there any additional features that would be beneficial? Make sure to compare products side-by-side to help you make an informed choice.

Let’s consider three types of digital lenders:

  • Early-stage Digital Lender  – a newcomer in the digital lending business –   the best recommendation is to choose a product with fixed functionality at an affordable price, let ‘s call this Loan Out of the box .This the most inexpensive software type on the market.
  • ‘Base Digital’ lenders need more robust functions for the customization of financial products and  enhancement of customer experience.
  • ‘Digital Plus’ lenders need a configurable platform covering many lending products

We are offering the product for all market segments. The company can develop and increase the functionality of the product using CompassWay’s platform.

Our platform has the following functions:

Configurable Loan Application Flow

A convenient loan application editor allows you to create loan application workflows in a few clicks without the need for coding and special skills;

Starting the lending process quickly and being able to make changes while the system is running is our priority

Product Engine

The product specification describes which parameters of a particular transaction type are fixed and which values can be changed;

You are free to create customized product structures;

Borrowers Portal

Borrowers can easily and conveniently manage their data, apply for new loans and repay existing loans;

The client can check the balance of the loan debt, find out the amount of the next payment, track recent transactions, and much more;

Risk Evaluation

Maximize the portfolio income keeping its risk measure lower than the initial value;

Choose the most relevant algorithms from a wide variety of options

KYC & Credit Scoring

Adapted KYC/AML and ID checks;

Use machine learning and artificial intelligence to better assess creditworthiness and reduce non-performing loans;

Get a guarantee that only verified users can become customers of your company;

Reduce the development time from months to days by automatic training, testing, monitoring and controlling your model;

Powerful API Engine

Build, test, and apply customized APIs with Flow Building tools and a built-in Configurator;

Perform visual process of no-code integration;

Track how your integrations perform, their uptime, and security;

Compasway’s platform. One platform – many solutions.

Finally, consider the customer service offered by each provider before making a purchase. Do they offer live support or online assistance? How long is their response time? Is their help desk open 24/7? These are important details to consider when selecting your lending automation software.


The benefits of automating your lending process are clear—by streamlining your process and automating key tasks, you’ll save time and money. And the right software will make it easier for you to keep on top of your lending operations, so you can focus on your business growth.

Analyzing all the above information, it is safe to say that Compassway’s Digital Lending Platform is the best solution for your business. After all, it combines all the requirements of a good Lending Automation Software and will enable your business to grow and have new customers.

Interested in CompassWay’s ready-made solution? Contact our team to book a demo