Survey: 40% of Companies Agree that Manual Documentation, Data Gathering Negatively Impact Loan Processes

ForwardAI, a Fintech offering aggregated access to accounting & business data and analysis, collaborated with LendIt Fintech, which is focused on innovation in lending and virtual banking, in order to release a whitepaper/survey on how direct data access “improves small business lending.”

The report highlights how lenders use business and financial data, “apply technology to predict borrower outcomes, and drive credit decisions, outlining specific customer experience and process improvement opportunities,” according to an update shared with Crowdfund Insider.

Key highlights from the newly released report, which may be download here, include the following:

  • 40% of respondents “agree that manual documentation and data gathering negatively affect loan processes”
  • 15% of lenders are already “using direct data collecting to access borrower information, compared to 47% of lenders who still use manual processes such as emails, PDFs, and spreadsheets”
  • 33% of lenders are “collecting financial data within three days of an application, while 40% of respondents take more than one week and an astonishing 19% take more than two weeks”
  • 26% of companies are “using fraud detection software to identify altered, outdated, or fraudulent loan application data”
  • Nearly half of the surveyed companies “spend between $0 to $100,000 on loan process software”

As explained in the update, direct data access, “combined with forward-looking insights, allow lenders to more accurately predict a business’s ability to repay a loan.”

Nick Chandi, CEO and Co-founder of ForwardAI, stated:

“Manual or even paper-based data collection is still widespread among business lenders, resulting in inaccurate, inconsistent and time-consuming underwriting decisions. Open Finance-enabled access to banking and accounting data, integrated with predictive data points, not only improves underwriting confidence and efficiency, but has the potential to unlock additional service offerings such as customizable repayment plans and financial advice.”

Peter Renton, Chairman and Co-Founder of LendIt Fintech, remarked:

“We would like to think, after all the advances made during the PPP program last year, that underwriting for business lending is now streamlined and automated. Unfortunately, our research shows that is not yet the case. Too many lenders are still collecting data from small business owners manually via PDFs, email and spreadsheets. Efficient delivery of business data via API is sorely needed.”

The report offers actionable insights on how financial institutions and business lenders can “take advantage of Open Finance-enabled technology, streamlining the client intake process and providing intelligent, need-based financial services.”

Findings are reportedly based on a survey carried out by LendIt “among national and regional U.S. banks, credit unions, community institutions, and Fintechs.”

As noted in the update, ForwardAI is “improving access to aggregated accounting, financial, and business data for banks, lenders, and fintechs.”

With leading small business software integrations available, the intelligent PreciseMatch™ tech, deep client analysis, forward-looking data insights, and complete suite of calculated KPIs and ratios, ForwardAI customers can “turn client intake and assessment into only three quick steps.”

Solutions that are offered include an API, a partner portal, and a client-facing cash flow forecasting and planning tool.


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