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In today’s rapidly evolving financial landscape, commercial lending departments at banks face increasing pressure to operate efficiently while maintaining high levels of accuracy, compliance, and customer satisfaction. Traditional lending processes, often heavily manual and fragmented, can slow down operations, increase the risk of errors, and make it challenging to scale the business. Automation is emerging as a transformative solution, enabling commercial lending departments to streamline workflows, reduce operational risk, and improve overall efficiency. In this blog, we examine five notable ways in which automation – including specific features in AXIS by AIO Logic – enables greater efficiency in commercial lending.

Streamlining Loan Origination

The loan origination process is the first point of contact between a bank and its commercial borrowers, and it often involves extensive documentation, credit checks, and internal approvals. Manual processing of these tasks can be slow, error-prone, and resource-intensive. Automation tools can accelerate origination by digitally capturing borrower information, performing real-time credit assessments, and flagging potential compliance issues. By integrating these tools into a unified platform, lenders can reduce the time it takes to evaluate applications, provide faster responses to borrowers, and free up relationship managers to focus on higher-value activities such as client engagement and advisory services.

For many firms, manual tasks in the origination process can lead to bottlenecks that could be prevented with automation. With AXIS by AIO Logic, lenders can automate tasks throughout the origination process, leading to significant increases in efficiency. For example, AXIS can automate the initial screening and validation of loan applications, reducing the time and effort required for manual processing. AXIS can also translate loan parameters into contracts and other legal documents, ensuring that all necessary documentation is generated accurately and efficiently. Additionally, AXIS automates financial spreading and credit assessment, which will be discussed further in the next section.

Enhancing Underwriting Accuracy and Consistency

Underwriting is a critical function that determines the risk profile of a commercial loan. Traditionally, underwriters manually review financial statements, credit reports, and other relevant documents to make decisions. This process can be inconsistent and susceptible to human error, especially when dealing with complex financial structures or large volumes of applications. Automation allows underwriting processes to be standardized, with algorithms analyzing borrower data, detecting anomalies, and scoring risk according to predefined criteria. This not only enhances accuracy and consistency but also ensures that lending decisions are well-documented and easily auditable, reducing regulatory risk for the bank.

As noted in the previous section, AXIS provides lenders with automated financial spreading and credit assessment capabilities. In AXIS, users have the option of spreading financial statements through AXIS’s spreading interface, through upload, or through integration with borrower accounting systems. Once financials are spread into AXIS, the platform automatically performs vertical, horizontal, and trend analysis in order to calculate 42 financial ratios and score borrower financial health. However, AXIS’s credit assessments are not based solely on financials, as a wide range of data points (e.g., financial statements, transaction history, market data) are analyzed to assess the creditworthiness of borrowers, providing more accurate underwriting.

Optimizing Workflow Management

Commercial lending involves multiple teams, including relationship managers, credit analysts, compliance officers, and operations staff. Coordinating these teams manually often results in bottlenecks, duplicated efforts, and delayed loan processing. Automated workflow management systems help coordinate tasks by assigning responsibilities, tracking progress, and sending alerts for pending actions. These systems provide full visibility into the lifecycle of a loan, enabling managers to monitor workloads, identify inefficiencies, and make data-driven adjustments to improve throughput. By reducing manual handoffs and ensuring that tasks are completed on time, banks can significantly increase operational efficiency.

Optimizing workflows can lead to a massive increase in efficiency, so we placed a heavy emphasis on this when building AXIS. In fact, AXIS automates complex workflows across a broad range of commercial and structured loan structures, eliminating process fragmentation and error. AXIS also analyzes workflows to identify bottlenecks and inefficiencies, leading to streamlined processes and reduced operational costs. Additionally, AXIS features Requirement functionality that allows for distributing, tracking, and completing outstanding items throughout the origination process and loan lifecycle. This allows all relevant parties to know what is outstanding, who’s responsible for it, and when it’s due.

Simplifying Payment Tracking and Servicing

Once a loan is disbursed, servicing it can be equally complex. Banks must monitor payment schedules, track outstanding balances, and ensure that covenants are being met. Traditionally, this requires manual reconciliation and frequent communication with borrowers, which can be time-consuming and prone to oversight. Automated systems can track payment schedules in real time, send alerts for missed or upcoming payments, and flag covenant breaches for immediate review. By automating these routine monitoring tasks, lenders reduce the risk of default, improve borrower relationships through proactive communication, and allow their servicing teams to focus on more strategic portfolio management activities.

As a truly end-to-end platform, AXIS features automation at every step of the loan lifecycle including loan servicing. For example, AXIS features automated payment schedule creation based on loan parameters. 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 offers one-click payment capitalization standard out of the box. When a payment is capitalized, all accrual and balance information is automatically updated at the loan level and in aggregated reports. Additionally, AXIS automatically generates and emails invoices and monthly statements, further reducing the workload of servicing teams.

Driving Data-Driven Decision Making

Automation does more than just reduce manual labor; it provides commercial lending departments with access to richer, more accurate data. By collecting and analyzing borrower information, repayment trends, and portfolio performance in real time, banks can make more informed decisions about risk, pricing, and resource allocation. Predictive analytics can forecast potential defaults, identify cross-selling opportunities, and optimize lending strategies. This data-driven approach allows banks to be more agile in a competitive market and ensures that operational improvements are aligned with strategic business goals.

Thanks to the end-to-end nature of AXIS, our platform is built with powerful data integration, which allows for greater strategic decision making. In fact, AXIS enables automated ingestion, structuring, and centralization of unstructured source data such as financial statements, borrowing bases, loan tapes, and more. This reduces data entry costs and errors while also making automated downstream analytics possible. Additionally, AXIS rigorously analyzes vast amounts of data quickly and accurately to automate real-time underwriting, borrower financial health monitoring, collateral analysis, portfolio risk, and policy compliance.

Conclusion

The commercial lending landscape is evolving, and banks must find ways to improve efficiency without compromising accuracy, compliance, or customer experience. Automation offers a comprehensive solution, streamlining origination, underwriting, workflow management, payment tracking, compliance, and data analysis. By reducing manual effort, minimizing errors, and enabling data-driven decision-making, automation empowers commercial lending departments to operate more efficiently, scale their operations, and ultimately deliver better outcomes for both the bank and its borrowers. As technology continues to advance, embracing automation will not just be a competitive advantage, it will be essential for sustainable growth in commercial banking. If your firm is seeking to utilize automation to enhance efficiency, we invite you to contact us today to schedule an intro call and learn more about all that AXIS has to offer!