In the digital era, most processes are supercharged and are completed in a fraction of what they used to take earlier. Loan processing is one such process where financial institutions have significantly cut down the turnaround time, enabling their customers to have faster access to credit.
In a bid to further improve loan processing times, financial institutions are looking to automate their backend processes. Given that most retail lenders focus on small-ticket loans, payslip processing automation is one of the fundamental necessities in the current credit underwriting landscape. Automating data extraction can enable lenders to improve their response times and feed more accurate data into their loan management systems.
This article discusses how automated processing and verification of payslips can improve loan processing and disbursal.
Earlier, lending teams manually typed data from payslips that came in for loan requests. Manually entering data is a cumbersome task with high chances of human errors. However, intelligent payslip processing has radically changed how salary slips are processed. The process automates the part of the digital-form field. It also uses AI and other smarts to ensure software-level verification that allows employees to focus more on critical tasks related to loan processing and improve the overall value proposition for the end customers.
Documents are a vital part of the entire loan origination system and process. For instance, most borrower applications will have salary slips, and they help lenders in income verification. Salary slips are one of the most common enablers in loan processing,
The problem with salary slips is not that they contain a world of data but that India and most countries globally do not have a standardized format for issuing them. Some even include handwritten notes. Therefore, it makes the verification process cumbersome for the lender.
Modern solutions like Perfois’ Payslip Analyzer are well placed in revamping the role of payslips and how they are analyzed for loan processing. These solutions are available as APIs that can be easily integrated into the present loan management system of the lender and enable them to streamline their loan processing.
Here’s how payslip automated processing and verification helps in loan processing –
Traditional payslip processing and verification would take hours for a lending team, owing to the complexities involved and the lack of a universal format. With automation, near-real-time payroll processing has become a possibility, and the focus is on improving it to real-time. It allows lenders to process the loan application faster and significantly improves the time gap between loan application and loan disbursement.
Manual processes are always bottlenecked because of possible clerical or other serious errors creeping in. With all of it shifted to AI and ML-powered software, lenders are assured of improved efficiency even while extracting critical data. It streamlines loan processing and the time lenders spend on routine salary checks.
Cost-saving is an integral part of retail lending. Given that most retail lenders have limited resources, the ability to automate a task like payslip processing is worth its weight in gold. It helps them engage in superior income verification by allowing seamless data extraction across fields, such as salary period, days/hours worked, gross and net salary, and more with accuracy. It enables the lender team to focus on more vital tasks and cut down costs involved in tedious processes and a part of the verification journey.
Financial institutions find it difficult to conduct routine fraud checks because of payslip digitization. Also, lenders can no longer point out manual tampering as quickly as before.
Perfios Fraud Check Unit is a one-stop solution for payslip fraud detection. It is a fraud check automation solution that helps the lender figure out if the salary slips submitted to them are tampered with or not. We have three channels – Green, Amber, and Red, which inform the lender of the potential risks involved. It uses AI and ML and runs multiple cross analysis to find out potential fraud triggers and disclose the same to the financial institutions.
With frauds becoming more and more common, using AI and ML can be the way forward for lenders to reduce the rate of loan frauds. Even otherwise, adopting solutions like Perfios Payslip Analyzer would enable these institutions to significantly cut down on payslip processing, thereby improving the entire loan process.