Unlock faster, fairer loan approvals: The key role of digital expense verification for financial institutions

‍Introduction

When it comes to loan approval, too many financial institutions overlook a critical step that can significantly impact credit decisioning: automated expense verification. Instead of gaining instant and accurate information on individual borrower’s expenses (such as spending, savings accounts and loan repayments) by using new technology such as Open Banking, many banks still rely on laborious manual work, running the risk of fraud, slow loan approval and deep service dissatisfaction.

Even in the digitally mature Nordics, while the majority of banks are aware of the real need of expense verification, most have not yet implemented digital processes. However, in today’s competitive landscape, banks and other lenders need to do more to  enhance the customer experience. By automating expense verification, not only do financial institutions optimise customer satisfaction, they also cut laborious paperwork and decrease the risk of fraud.

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Go digital for streamlined efficiency

To ensure a seamless loan application process and enhance credit decisioning, it's time to ditch manual processes. By embracing digital expense verification lenders can save time and reduce the risk of errors. Consumers today expect their financial experiences to be as quick and easy as other areas of their life. With flexible and faster loan approvals, lenders optimise the customer experience while saving their credit or loan departments valuable time.

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Rely on reliable data sources

Accurate affordability assessment requires reliable data sources for expense verification. Instead of relying solely on the information your applicant provides, leverage Open Banking to gain a comprehensive understanding of their lending and spending patterns. By obtaining digital insights into their individual financial activities, more suitable loans can be granted in less time.

Combine expense verification with income verification

For better credit decisions, it's crucial to consider combining automating both income verification and expense verification. By combining the two, financial institutions get a more complete picture of the borrower’s financial situation. This approach not only streamlines the consumer experience, but also improves application conversion and accelerates processing.

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How Monthio can help

Monthio offers an unparalleled expense verification solution that provides a comprehensive categorization of expenses. This allows you to gain complete insight into your applicants' spending habits. The solution utilizes Open Banking and other financial data to offer a real-time 360-degree financial overview. With consolidated data accessible through their user-friendly dashboard or API, Monthio simplifies the decision-making process for credit advisors and loan officers at banks and credit providers. Say goodbye to manual data entry and benefit from quick, informed decisions.