How Automation Can Improve Your Financial Spreading Process
Financial spreading is the process banks and financial institutions use to review and analyse a client’s credit status and capacity. Financial spreads are created through statement records to understand the client and help the financial institution determine their creditworthiness. With so much paperwork used in this process, more lenders turn to automated financial spreading for its many benefits.
During financial spreading, lenders do not alter any information. Instead, they also rely on borrower inputs, so the borrower understands their situation. Therefore, borrowers can make better decisions for themselves and the lenders regarding loans, investments, and credit. Making more informed decisions also means that lenders get more honest outcomes and fewer loan defaults and other unfortunate incidents.
Turning to automation has made this process much easier.
Why is automated financial spreading gaining popularity?
In the past, many lending institutions used manual financial spreading. There, the documents and financial statements were manually scanned and uploaded to a computer or software. Any information required was also input manually. If different people needed to provide the same information, they have to do this individually, with no central way of updating information across the board.
The resulting process was highly time-consuming, requiring skilled practitioners and resources competent across borders and languages. Automated financial spreading, therefore, significantly simplified this process with automatic categorisation and minimal human intervention. Therefore, the margin for error was also much less as the steps were streamlined and standardised.
These are already significant benefits, with improved efficiency making the top of the list. Some other such benefits include the following.
Increased Accuracy
The biggest benefit automation offers remains high accuracy. Since every client’s financial spread is analysed to understand their status, accuracy is a necessity. To err may be human, but this erring is easily avoided with automation. The errors of manual spreading no longer exist to compromise the data.
Automation also affords this accuracy with speed. Therefore, efficiency is exponentially improved through automated financial spreading. Lenders and investment advisors receive accurate data quickly and can access it at any point for deeper analysis.
Improved Customer Service
Automation offers the perk of organisation and precision. Sheets and charts can be created automatically, helping the customer better understand the data presented. With automated, comprehensive overviews, your customers and borrowers are more satisfied since they do not need to rely on an economic advisor.
Instead, automation enables a customer-centric work ethic that prioritises their needs and does not trick them. An automated database also allows them to recall information at any point for more educated decision-making.
Faster Processes
Speed is everything in finance, and automated financial spreading ensures this. Businesses often need to pull up information or map finances quickly. Especially in emergency cases where timeliness is key, automation ensures all the necessary information is at a lender’s fingertips. Additionally, faster loan approvals ensure higher client satisfaction. Combining automation with AI can further improve this data collection and consequent efficiency.
More Cost-Effective
While the manual method requires trained staff and more resources, automation is much more cost-effective. In the manual mode, you would need data analysts and manual spreaders for a comprehensive understanding of a client. With automation, this is no longer a requirement.
Automated financial spreading achieves this across languages and borders, offering much better analysis for a fraction of the cost. As more experts develop automated spreading models, companies continue making this shift for better business practices.
Better Risk Management
If improperly or incorrectly executed, managing finances can be very confusing and difficult. Many businesses take risky decisions simply due to the lack of an efficient system to prevent this. Automation offers this efficiency with insightful analyses for better risk management.
Both the client and lender get a more defined idea of the challenges they may face through borrowing or investing. Risk analysis of this depth ensures long-term financial planning for both parties. It compiles all the necessary information in a single place to help risk prediction and mitigation. The benefits of automated financial spreading are clearer today than ever before. More people understand and appreciate its offerings, understanding what they can bring to any company. When integrated with other aspects in the lending process, automation further improves the loan experience for both lender and borrower.