The loan arrangers: Online services to cut the paper
The loan arrangers: Online services to cut the paper
Joining the myriad of facilities for easier borrowing, lending broker E-Loan uses in-house workflow to process loan applications online.
E-Loan Australia is setting out to disprove some of the myths about the difficulty of doing business online. The site, which was launched in February, has appeared in the midst of banks, lenders and brokers who have each tried to best each other with features designed to entice consumers to make larger financial transactions online.
As well as not having the 'first site' advantage, E-Loan's business model is partly focused around acting as an intermediary between borrower and lender. This is in an environment that has been less forgiving toward middlemen in such sectors as travel, where online access has allowed consumers to directly contact suppliers.
To make its offering viable, E-Loan has had to offer a service slightly different to what is available, and ensure that what it does, it does well.
Speed is crucial to E-Loan's business model, which enables borrowers to select, submit and pursue loan applications online.
E-Loan provides a free information resource on more than 140 loan products offered by more than 11 financial institutions. Users give information about the loan they want, and compare the results for a product that suits.
The site's aim is to cut the time and running around consumers invest into looking for a loan themselves, by offering a range of options that can be whittled down in minutes online. "One of most powerful things about the Internet is that it gives customers the opportunity to take data and sort it according to their requirements," said E-Loan general manager of marketing, Ian Whitehead.
ONLINE WORKFLOW
The main impetus behind E-Loan's design is to provide and act on information quickly and make the loan searching and application process as easy as possible for the consumer. To realise this model, E-Loan has invested in as seamless an integration of its back and front end functions as possible.
To search the range of loan products, a customer enters data such as the loan amount and the property value. E-Loan's search engine comprises several Oracle databases or tables in a Unix environment for specific aspects of the site. The user information is filtered from the group of databases to return a set of results that compares the loan lifespan, interest rates, fees and charges and other terms.
"It may take days to weeks to run around to look at three to five loans from different lenders, whereas here it takes a few clicks," said E-Loan CEO John McGee.
If the customer selects a loan product, they can commence the application process online immediately from within 128-bit encrypted section of the site, then submit it.
From the moment a customer submits an application, E-Loan automatically generates a workflow file dedicated to their job. The tool, called E-Track, was developed by the company to provide a diary of deadlines, along with data on when information has been dispatched, sent to the borrower or lender, deadlines, and the loan status and updates on any supporting documents that may be required.
Users access their E-Track account from the site with a log in name and password.
Much of the data in E-Track is added manually by E-Loan staff as documentation is received or dates are scheduled, however the company is exploring how to automatically introduce more of these entries.
E-Loan downloads the application into its internal database in an XML format and prints a copy of the application for the customer and for its records. Each lender has a different set of criteria of supporting documents to the loan, and E-Loan's system automatically attaches the appropriate checklist when the application is downloaded, which is retained with the customer's hard copy file.
E-Loan also mails the applicant a copy of the checklist and a declaration form for them to sign, a stage in the process Mr Whitehead said may become electronic with digital signatures, although this is some time away.
Each conversation relating to an application is entered into E-Track, and consultants use this and a contact management system to remind them to follow up documentation, meetings and the like throughout the application process. Mr Whitehead said that the second phase of this system will aim to incorporate an auto contact feature via phone and email. "This kind of support is important for consultants, especially if they have 20 to 30 clients at one time," he said.
This contact management system also auto routes incoming calls from customers to the same consultant throughout the process, to make it easier to monitor the status of the job.
"We are also looking at attaching Word documents to the live chat that is currently available as a way of speeding up the approval process, by quickly giving customers documents they need to complete," said Mr Whitehead.
Lenders also use E-Loan to interact with the borrower, so the consultant stays in the loop to maintain E-Track. "If the lender requires a valuation, for instance, they contact E-Loan to set it up, and post the valuation to the site or use E-Track to notify the customer the valuation is available," said Mr Whitehead.
E-Loan is aiming to automate this process in future as well, however this will depend on the participating lender.
Even when the loan is approved, Mr Whitehead said the lender uses E-Loan to interface with the borrower and set up settlement times. When the loan is finalised, Mr McGee said E-Loan takes an unspecified fee.
A MODEL BUSINESS MODEL?
While it incorporates some manual steps, E-Loan can deliver most lender responses to a loan application within 24 hours. "We also want to introduce an auto response from lenders to provide an answer more quickly," said Mr Whitehead.
The company plans to move to a full end-to-end Internet experience, in which the customer can complete and submit applications online. It is investigating new solutions to realise this, and Mr Whitehead predicted the site would begin rolling out new features within six months.
"Although these steps aim to make the process faster, we are able to process approvals within 24 hours now. Speed of delivery is crucial to our business model," said Mr Whitehead. "In one situation, a customer submitted an application at 11am, and received approval mid-afternoon that day. From a customer's point of view, this kind of turnaround is an extraordinary experience."
Mr Whitehead said the site will be able to service applications even more quickly if it can integrate its application systems with those of lenders.
"The greatest challenge is making sure customer expectations are matched by suppliers," he said. "We would like to be able to access the electronic scoring applications used by lenders to approve a loan, to give applicants a tentative yes or no in minutes."