Custom Limit and Collateral Management Software

Loan officers can set up and manage custom loan limits for particular borrower segments and loan types (installment and revolving loans; commercial and consumer loans; secured, non-secured, and government-sponsored loans; group and syndicated loans).

Loan limit compliance is automatically verified against the lender’s internal policies and relevant regulations (e.g., FDIC and OCC guidelines for the US). Software instantly alerts on compliance breaches and suggests the proper loan limits to meet legal requirements.

Software relies on AI, RPA, and image analysis techs to automatically capture and process multi-format borrower data and collateral documents. AI verifies borrower solvency based on the data provided by borrowers and data from trusted third-party sources (e.g., banking systems, credit rating platforms).

Collaterals get automatically registered in a centralized database or a blockchain ledger and allocated to one or several (for cross-collateralization) loans based on user-defined rules. Lenders can create custom registration templates for various types of collaterals: real estate, securities, commodities, equipment, etc.

Collaterals are valuated using AI or custom rules that consider asset liquidity and risks, available data on asset condition (for non-financial collaterals), and market prices for similar assets. Discounted collateral values are calculated based on custom formulas.

Software provides an AI-supported or rule-based decision on borrower eligibility for the requested loan. For this, it analyzes the borrower’s debt-to-income ratio, the collateral coverage ratio, and a lender’s up-to-date capital, surplus and undivided profits (CUPS).

Collateral officers can create collateral agreements with user-defined terms (the pledged asset type and value, coverage thresholds, insurance, seizure terms, etc.) from customizable templates. Software auto-populates the contracts with borrower data and updates them when the data changes.

Collateral portfolio structures can be designed to accommodate user-defined hierarchies and asset types. Interactive dashboards provide a real-time overview of accepted collaterals, collateral-associated transactions, and KPIs like collateral quality index, utilization rate, and risks.

AI-powered software enables real-time recalculation and tracking of collateral values, coverage ratios, and exposures at the asset, asset class, borrower, business entity, and portfolio levels. It analyzes the as-is risk metrics vs. pre-set thresholds and instantly notifies loan officers of any gaps.

AI can be employed to analyze real-time data on collateral state, collateral asset market indices, and predefined portfolio performance metrics. AI-based solutions can suggest the optimal steps to minimize portfolio risks, e.g., implementing particular portfolio diversification or hedging strategies.

When integrated with the lender’s loan servicing system, the software enables real-time monitoring of the borrowers’ revolving credit balances. It calculates the up-to-date credit utilization ratios and tracks the outstanding debt amounts against the borrower-specific loan limits.

When a borrower repeatedly defaults on loan repayment, the software notifies the responsible employees to initiate collateral liquidation. It can automatically generate and send borrower notices on asset seizure, calculate the base value for the collateral and costs of a liquidation proceeding, and report borrower delinquency to regulators.

Reports are generated automatically from customizable templates (e.g., collateral performance reports provided to senior management, collateral valuation reports requested by borrowers) or according to a predefined compliant format (for regulatory reports, e.g., HDMA, FINRA, FHA, NCUA collateral reports).

The software and sensitive lending data it stores are protected via role-based access control, multi-factor authentication, data encryption at rest and in transit, intelligent UEBA, and more. Custom solutions can provide compliance with SOX, SOC1 and SOC2, GDPR, NYDFS, CCPA, and other necessary data protection standards.