The potential of intelligent document extraction for the leasing industry
The leasing of a wide range of assets, both for private individuals and companies, is becoming increasingly popular due to its many advantages. However, increasing competition and the rising costs for administrative processes and compliance result in more meaningful pressure for greater process efficiency and improved customer experience. As a consequence, leasing companies are looking to automate specific processes in order to make themselves more attractive, competitive, and to benefit from market growth. Some of these suitable processes can be found in document management.
Current process design
Document and form-based work processes are one of the essential foundations of the financing business. Even a single customer inquiry can involve the submission of dozens of different documents such as a confirmation of residence, payroll or bank statement, and can also result in the generation of new ones. Implied tasks such as document capture, the potential physical distribution to internal departments and possibly even re-entry or other kinds of processing of these documents take up a lot of time and human resources. If we now consider the cost base for these activities, it quickly becomes clear that a not insignificant part of the financing costs of leasing is factored in for these administrative purposes.
Another very important aspect, especially when it comes to customer experience, is the processing time. In other words, how long it takes until a final decision can be made after the application has been submitted. Since the vast majority of leasing companies have structured and organized their processes in such a way that there are numerous interfaces, these processing times are correspondingly high. This means that there is great potential for structural optimization and the development of a customer experience that can lead to a wow effect for customers.
Here’s a brief digression: Take a look at the digital onboarding of neobanks and now also of various established financial institutions. They have completely automated the majority of the processes involved, enabling you to open a fully functional account and explore or take advantage of further product offerings within just a few minutes. When I opened such a new client relationship myself, it was an extremely refreshing experience for me. One that per se did not correspond to my hitherto established image of banks and therefore surprised me positively. In this context, I also talked to several of my friends about my experience what led some of them to open an account as well. You see, the potential for word-of-mouth propaganda can be very interesting. If the status quo is relatively worse off, you can even leverage its effects.
Although the processes in the leasing industry are not exactly the same, I think that focusing on this type of customer experience can greatly help to rethink the way leasing services are handled and distributed. So in addition to fundamental change work, such a reorganization of structures and processes also requires the implementation of new powerful information technologies that allow for robust automation and support the orchestration and execution of the new processes.
Use cases for intelligent document processing
One of the subcomponents of such a system landscape is software for document processing. By integrating such software, the classification and data extraction of your documents can be automated, which saves you time and money. Now, software with this functionality is not new per se. However, the architecture of the available solutions is very different and so is their performance and resilience for processing unstructured documents. For a more detailed explanation of the relevant differences between traditional extraction solutions and new machine learning-based approaches, please read this specific blog article here.
But why is such automation software for documents so important in general? The answer is simple: With automated document processing you can fully automate many more standardized tasks and processes. After all, you already have comprehensive automation options. However, as soon as documents come into play, there are always special cases that require additional processing by employees, thus preventing unnecessary automation, increasing processing times and generating additional costs. In addition, you are missing out on the opportunity to implement a “round the clock” online service, i.e. a 24/7 service, which could increase customer friendliness respectively experience.
If you implement a modern extraction solution, you can change that. Three concrete dimensions for use cases stand out in particular:
Customer onboarding & KYC
If you integrate the functionalities of intelligent document processing into your standard processes or even a digital-first customer experience, you have the opportunity to significantly reduce processing times and, depending on the case, even be able to give the customer immediate feedback. Imagine that a customer submits his application documents for a lease online which triggers the follow-up process. The integrated extraction technology processes the submitted documents within a few seconds and feeds the extracted data in a structured form into your other IT systems where the data gets evaluated on the basis of predefined rules and models. Are the identification documents complete and permissible? Have all relevant documents been submitted? Do other claims already exist for the applicant? Etc. Examinations like these and also the financial evaluation or decision-making (i.e. acceptance, rejection or escalation and forwarding to a credit risk officer) can be depicted automatically in most cases.
Customer (self-) service
This type of technology can also generate added value in customer service for ongoing customer relationships. Because it enables customers to quickly and easily process contract changes, payment breaks, early repayment requests and other transactions online at any time without or with only limited manual effort on the part of the leasing company.
Not to forget, of course, all other internal processes of the daily business, which are also relying on documents and can be made more efficient through their automation or partial automation. Classic examples are ordering and delivery processes, incoming invoice processing, various contract management processes, and other administrative processes.
Through these partially or fully automated, more efficient and flowing processes, financial institutions can get back control over their cost structures, reduce product prices, and increase their productivity, market attractiveness, and customer satisfaction.