Approvals

You can use all the standard Salesforce features while using Q2 Origination for origination. A very common requirement is having approval on the application by various officers/roles in order to move the application processing to the next department. For creating the approval process, see the Salesforce link for creating approval process. 

You can make the approval process simple or complex and add different reviewers/queues to the process. You can specify the criteria based on which each reviewer approves, rejects, or conditionally approves an application. You can also define the actions that must be taken based on the outcome (approved/rejected/conditionally approved). For example, approval action may be to progress the application to the next stage for processing and approval. A conditional approval action may be to send back the application in case any detail is missing, or if a critical criterion is not met, then totally reject the application. 

The approval process must be created on the Application object of Q2 Origination. After you generate the pricing options for an application and the borrower agrees to these, you can progress the application for internal approvals. These can be configured online as online tasks in the application dashboard or configured using the Task Flow Config feature. You can also leverage the Deal Room for configuring internal approval tasks by defining the required documents under a relevant category for this.

Approval process

Financial institutions use an approval process for the approval of a loan or a lease application. Every application must be reviewed by one or more reviewers. Financial institutions have a defined authority matrix that determines the set of reviewers, their approval limits, and the cadence - the sequence to route and execute the review process. 

The financial institutions can configure the authority matrix defined for the review of an application. This feature ensures that all the reviews required for an application are done, and the approval history is tracked. Various types of review processes and cadences are provided with this feature that can be used to design the approval process workflow for an organization.

Approval process types

Approval process types vary from one another based on the workflow required to review an application. 

The following are the types of approval processes configured with Q2 Origination:

Complex Approval Process

In a complex approval process, the reviewers can review an application if they satisfy the assigned individual and/or combined limit and the approval authority criteria.

• Individual Limit: This is the limit up to which a reviewer can individually approve an application. The limit can be applied to the financed amount, loan amount, or term. If only one approval is required to approve an application, it comes under the individual limit.

• Combined Limit: This is the limit up to which a reviewer, along with other reviewers, can combinedly approve an application. The limit can be applied to the financed amount, loan amount, or term. If multiple approvals are required to approve an application, it comes under the combined limit.

• Approval Authority Criteria: This is a criterion based on which a list of active reviewers is displayed on the Approvals tab.

Example: A loan application for the amount of $500,000 is submitted for approval. Approvers A, B, C, and D have a defined limit to approve an application.

So, either D can individually approve the application, or A, B, C, and D can combinedly approve it.

In Q2 Originate, a complex approval process is defined based on the following parameters:

• Approval Definition: An approval workflow definition needs to be created by specifying the required details.

• Entry Criteria: Entry of an application into the approval process is dependent on a criterion that needs to be defined. Or A criterion needs to be defined based on which an application enters into the approval process.

• Reviewers: Approval or rejection of an application has to be done by reviewers who need to be assigned. Or The reviewers need to be assigned to review an application and approve or reject it.

• Individual or Combined Limit: These limits need to be defined for each reviewer to review an application. This is the amount up to which the reviewer can approve an application but no higher. 

• Approval Authority Criteria: The listing of reviewers on the Approvals tab to review an application is dependent on the approval authority criteria that need to be defined.

Cadences

Cadence is the sequence to route and execute the review process. 

Following are the default cadences configured with Q2 Originate:

• Unanimous

  

  In the Unanimous cadence, all the reviewers need to review the application. The review sequence need not be in any order.

  For an application to be approved/conditionally approved, it needs to be reviewed by all the reviewers of that cadence. Otherwise, the application remains in the Submitted status.

  Note:

  • If all the reviewers approve the application, its status changes to Approved.

  • If any of the reviewers reject the application, its status changes to Rejected. The remaining reviewers are not allowed to approve, reject, or conditionally approve any further.

  • If all the reviewers review the application and any of them approve the application conditionally, its status changes to Conditionally Approved.

• Serial

  

  In the Serial cadence, all the reviewers need to review the application in the specified order.

  For an application to be approved/conditionally approved, it needs to be reviewed by all the reviewers of that cadence. Otherwise, the application remains in the Submitted status.

  Note:

  • If all the reviewers approve the application in the given order, its status changes to Approved.

  • If any of the reviewers reject the application, its status changes to Rejected. The remaining reviewers in the series are not allowed to approve, reject, or conditionally approve any further.

  • If all the reviewers review the application in the given order and any of them approve the application conditionally, its status changes to Conditionally Approved.

• Prescriptive

  

  In the Prescriptive cadence, only the required reviewers need to review the application.

  For an application to be approved/conditionally approved, it needs to be reviewed by all the required reviewers of that cadence. Otherwise, the application remains in the Submitted status.

  Note:

  • If all the required reviewers approve the application, its status changes to Approved.

  • If any of the required reviewers reject the application, its status changes to Rejected. The remaining reviewers are not allowed to approve or reject any further.

  • If all the required reviewers review the application and any of them approve the application conditionally, its status changes to Conditionally Approved.

  Example:

  Let us say that four reviewers, A1, A2, A3, and A4, are added to a Prescriptive group, but only A1 and A4 are the required reviewers.

  • Once the application is approved by A1 and A4, its status changes to Approved.

  • If anyone of A1 or A4 rejects the application, its status changes to Rejected.

  • If the application is approved by A1 and conditionally approved by A4, its status changes to Conditionally Approved.

  • If the application is approved/conditionally approved by A1 and A4 has not reviewed the application, its status remains to be Submitted.

• Conditional

  

  In the Conditional cadence, all the required reviewers of this group need to review the application based on the defined evaluation expression.

  For an application to be approved/conditionally approved, it needs to be reviewed by all the reviewers of that cadence. Otherwise, the application remains in the Submitted status.

  Note:

  • If the evaluation expression satisfies the approval condition, the status of the application changes to Approved.

  • If the evaluation expression does not satisfy the approval condition, the status of the application changes to Invalid. 

  • If any of the reviewers reject the application based on the evaluation expression, the status of the application changes to Rejected.

  Example:

  Let us say that three approvers, A1, A3, and A4, are added to a Conditional group. The evaluation expression is either A1 and A3 combinedly or A4 individually can review the application.

  • Once the application is approved by A1 and A3, its status changes to Approved.

  • If the application is approved by (A1 or A3) and A4, its status changes to Approved.

  • If the application is approved by A1 or A3, its status remains to be Submitted.

  • If the application is approved by A1, A3, and A4, its status changes to Approved.

  • If the application is approved by A4, its status changes to Approved.

  • If the application is conditionally approved by A1 and A3, its status changes to Conditionally Approved.

  • If the application is conditionally approved by A1 and A4, its status changes to Conditionally Approved.

  • If the application is conditionally approved by A1 or A3, its status remains to be Submitted.

  • If the application is conditionally approved by A1, A3, and A4, its status changes to Conditionally Approved.

  • If the application is conditionally approved by A4, its status changes to Conditionally Approved.