Bahaa Abdul Hussien in this blog shares his views on the digitalization of commercial lending with his audience. Commercial lending requires maintaining a fine balance between the risk and reward. A digital strategy is an important way to maintain this balance. Banks have shifted to digital mode to maximize their resources and offer better services to their customers. It has helped them overcome the challenges of managing the remote staff. Automation has become necessary to manage the loan application and review process.
Simplifying Commercial Loan Applications
Banks are under pressure to reduce the burden of data collection on their borrowers. The business loan applicants can be offered a simplified borrowing process with the help of digital applications. Better automation and electronic public data retrieval reduce the burden on loan applicants. They have fewer fields to fill in the loan application because most data they have to provide can be sourced from available sources. It speeds up the loan application process.
Paperless Transactions
Digital innovations have allowed all industries to reduce the use of paper documents. The banking sector is not resistant to this trend. Digital technologies have allowed it to offer faster, simpler and better services to the business customers. Electronic contracts and e-signatures have made it possible for the banks to digitally obtain many types of data including the signatures of loan applicants.
“With most governments and banking institutions giving legal validity to the e-signatures and digital records, it has become easier to conduct commercial loan transactions digitally. The recent pandemic has only expedited the adoption of such technologies.”, added, Mr. Bahaa Abdul Hussien.
It is now possible to conduct most secured and unsecured commercial loan transactions without submitting paper documents. These transactions can be conducted electronically. Some notarization and paper records are still needed when real estate properties are used as the security. However, remote and electronic notarization has increased the adoption of paperless transactions. Remote notarization is now valid across 25 states, while 23 other states have implemented emergency remote notarization due to the recent pandemic.
Over 68% of US counties now support e-recording for property documents. Users can submit the documents with e-stamp. It speeds up the submission of these papers to the title insurance provider. Real estate property documents and e-signatures have eliminated the need for wet ink signatures.
Remote notary technology and electronic signing have increased the speed of loan application and approval process. Commercial loan transactions can be conducted in a paperless way. Many services needed to review, service, track and maintain commercial loans have been automated. Now the applicants simply feed digital data into the required fields. There is no need to submit paper documents. These digitization and automation trends will continue in the coming years and improve banking experience for the commercial loan applicants.
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