The Automation of Loan Applications with Operational Decision Management

The outcome of any loan application is determined by several pre-determined rules or policies set by the institute lending the money. These policies and rules are constantly changing as the financial world evolves around them.


Many financial institutions still process these applications manually, meaning it can take days, if not weeks, to come to a final decision on the application. This in turn leaves customers waiting in limbo and likely to turn to a competitor’s products.


To approve a loan an employee must follow a range of processes and conduct a number of checks, in accordance with the rules and policies that are set by the financial institute and industry regulators. If these rules or policies change it creates operational chaos as institutes are unable to communicate the change to everyone involved in the application process and unable to update policy documents in a timely fashion.


Delayed Decision making can cost you dearly

These factors result in a poor customer experience, as customers end up waiting a long time for results. With the whole system proving ineffective, it leaves the bank open to an increased risk of errors and fraud. The application process could however be improved with the addition of a central decision maker.




Speeding up loan processing with Operational Decision Manager


With operational decision management, financial institutions are able to analyse, automate and govern rules-based business decisions, such as the decision to approve a loan, from a centralised location.


If we imagine an example of two loan applications, one from an older party with a greater household income and industrial stability, the another from a younger applicant with a small household income and less industrial stability. A decision manager can help staff score the loan applications in accordance with the bank’s rules and policies to decide if they will accept or reject the loan.


Using operational decision management, the staff are able to enter the details of the application, such as age, monthly income, education and occupational stability. This data can then be applied to a centralised network of rules the bank wants applied to all applications, quickly generating an overall score for the application, the probability of the applicant defaulting on payments and an overall rating for the application.


Watch this video to find out how operational decision management software can accelerate the processing of bank loans.




In line with these rules, the more financially secure older applicant is less likely to default on the loan and is given a better score than the younger, riskier applicant.


Using a central decision manager, financial institutes can also enact rule and policy changes that will affect these applications in real-time. For example, a bank might decide to alter the scoring it awards to applications over a certain age or on household income. By updating these rules within a central decision manager, the bank can communicate these changes to staff and online applications in real-time and affect incoming applications quickly and securely.


What is Operational Decision Management?


Many modern businesses face the issue of having their rules and policies spread over multiple locations, both physically and digitally. This can make applying them correctly incredibly difficult for employees and mean they are more exposed to fraud or negligence claims.


By having their rules in a centralised, digital location, businesses and their employees can access, update and apply the rules to any data. Another common real-world use case for operational decision manager is when employees are drawing up quotes.


When creating a quote, there are multiple strings of data for an employee to consider. These can include; the client’s personal data, their past transactional history, the current market price, the quantity they need and any discounts this might incur. Keeping track of all these different strands of data can be difficult, especially when strings like current market price can fluctuate. By using an operational decision manager, employees can streamline this data and generate a price quickly and efficiently. Superiors can also be confident in the knowledge that all the same rules and policies are being applied across the company, in a uniform fashion.


This is just one example of how businesses can use operational decision management to orchestrate, apply and govern business rules, businesses have found success using it for a number of applications including;

• To check rules.

• Approve transactions.

• Approve claims.

• Manage compliance and more all without any human intervention


Get in touch to find out how we at ABP Consultancy have helped our customers centralise, apply and govern their business rules with operational decision management.