Skip Links

Loan servicing teams play a critical role in managing commercial loan portfolios after origination, but their responsibilities often grow faster than available resources. From payment tracking and covenant monitoring to reporting, borrower communication, and compliance, servicing functions are frequently weighed down by manual processes and disconnected systems. As portfolios scale, these inefficiencies lead to operational strain, higher error rates, and employee burnout. Automation provides a powerful way for commercial lending firms to streamline servicing workflows, reduce repetitive tasks, and allow teams to focus on higher-value activities that support portfolio health and borrower relationships. In this blog, we examine five powerful applications of automation in the loan servicing process as well as relevant features in our AXIS by AIO Logic platform!

Automating Payment Processing and Reconciliation

Payment processing is one of the most time-consuming servicing activities when handled manually. Servicers must track incoming payments, apply them according to loan terms, reconcile balances, and investigate discrepancies across multiple systems. Automation reduces this workload by integrating directly with banking platforms to capture payment data in real time, automatically post transactions, update balances, and flag exceptions. By eliminating routine posting and reconciliation tasks, servicing teams can spend less time correcting errors and more time proactively monitoring loan performance.

As a truly end-to-end platform, AXIS by AIO Logic automates tasks across the entire loan lifecycle, including robust loan servicing capabilities. For example, an area of loan servicing that can often be quite time-consuming is loan balance management. Thankfully, AXIS streamlines this process by automatically generating a daily balance record for each active loan. The daily balance record shows all loan activity on that day including fundings, principal repayments, accrued interest and fees, and received interest and fees. The daily balance report also calculates the opening and closing balance of each loan ledger account for each day.

Streamlining Covenant Monitoring and Compliance Tracking

Covenant monitoring traditionally requires significant manual effort, including collecting borrower financials, calculating ratios, and tracking compliance in spreadsheets. Automated systems can ingest financial statements, calculate covenant metrics automatically, compare results against predefined thresholds, and generate alerts when issues arise. This approach dramatically reduces data entry and manual calculations while improving consistency and accuracy. Servicing teams are no longer burdened with reviewing every loan each reporting period and can instead focus their attention on loans that require action.

While many platforms on the market offer minimal compliance capabilities, we built AXIS with robust compliance functionality. In AXIS, covenant setup is quick and easy with all covenants being parametric and centrally tracked in the Loan record. The covenant type is chosen from a list (e.g. financial statements, DSCR) and parameters (e.g. frequency, due date) are entered. For financial covenants (e.g. EBITDA %, Fixed Charge Coverage), the testing benchmark is also added. All subsequent covenant tracking and monitoring is then automated. Additionally, once the required parameters are set, AXIS automatically creates a compliance calendar.

Reducing Reporting and Administrative Burden

Servicing teams are often responsible for producing recurring reports for internal stakeholders, investors, and regulators. When reporting relies on manually compiled data, it consumes substantial time and increases the risk of inconsistencies. Automation centralizes loan data into a single system of record and enables reports to be generated automatically on a scheduled or on-demand basis. Standardized dashboards and automated reporting workflows reduce administrative workload while ensuring timely, accurate visibility into portfolio performance.

Thanks to the end-to-end data integration in AXIS by AIO Logic, our platform enables unprecedented reporting automation and accuracy. AXIS offers over 60 reports and dashboards standard and out of the box, with each table in AXIS including a user-facing report that allows users to search, filter, and download data from that table. AXIS also features a large catalog of standard reports and configurable operational dashboards called Cockpits, which are customized to organizational specifications and roles during the onboarding process.

Improving Borrower Communication Through Self-Service Tools

Borrower communication accounts for a large portion of daily servicing activity, particularly when borrowers have questions about payments, reporting requirements, or covenant status. Automated borrower portals and notification tools allow borrowers to access loan information, upload documents, and receive reminders without direct staff involvement. This reduces inbound emails and phone calls related to routine inquiries, freeing servicing teams to focus on complex borrower needs and relationship management rather than repetitive communication tasks.

When borrowing from a lender who utilizes AXIS by AIO Logic, the borrowing company will receive access to the Customer Portal, which is the primary customer-facing interface. In addition to providing account and loan related information to borrowers (e.g. balances, documents, etc.), all requirement tracking and document submission is performed through the Customer Portal. Additionally, the Customer Portal includes productivity suite features, which enable the lender and borrower to collaborate through discussions, notes, and tasks.

Automating Payment Schedules and Ongoing Payment Tracking

Managing payment schedules manually can be surprisingly complex, especially for commercial loans with interest-only periods, step-ups, variable rates, or bespoke repayment structures. Automation allows payment schedules to be generated directly from loan terms and updated automatically when changes occur, such as rate adjustments, amendments, or extensions. Servicing systems can track scheduled versus actual payments, calculate accrued interest, and flag missed or partial payments in real time. This reduces the need for servicers to manually maintain amortization schedules or monitor due dates, ensuring greater accuracy.

As part of AXIS’s robust loan servicing capabilities, our platform automates the calculation and tracking of payment schedules. Based on loan parameters, AXIS automatically creates payment schedules. Then, on each payment date, AXIS automatically updates the scheduled payment record to reflect changed index rates, principal balance changes, and other loan activity. AXIS also performs similar tasks relating to fees with automated fee calculation and tracking available out of the box.

Conclusion

As commercial lending portfolios grow in size and complexity, manual servicing processes become increasingly unsustainable. Automation enables loan servicing teams to reduce their workload by eliminating repetitive tasks, improving data accuracy, and standardizing workflows across the portfolio. By automating payment processing, payment schedules, covenant monitoring, reporting, and borrower communication, commercial lenders can build servicing operations that scale efficiently while supporting stronger risk management and better borrower experiences. Ultimately, automation empowers servicing teams to shift from reactive administration to proactive portfolio oversight, delivering long-term operational and strategic value. If your firm is seeking to optimize its loan servicing capabilities, we invite you to contact us today to schedule an intro call and learn more about all that AXIS has to offer!