We are living in difficult times. The financial industry is challenged with the negative effects of COVID-19. Delinquency is rising, public institutions are introducing more stringent regulations and risk models may not fit as closely as they did just months ago. Add to this many uncertainties of a new way of working and you have an environment that requires strong loan management.
A good loan management system can enable organizations to pivot quickly, strengthen customer experience, as well as mitigate costly errors while streamlining internal processes.
Here are 8 must have features in a powerful Loan Management System:
- Compliance: Regulation changes; increased regulation in some areas, deregulation in other areas – regulatory compliance is a moving target. With so many different rules, standards and expectations in place, it can be difficult to keep track and maintain compliance without the aid of automated software. The software should be legally-compliant at all stages of the lending cycle.
- Configurability: Users should have the ability to make business rule(s) changes through configuration. Creating a new financial product needs to be done in a matter of hours, not weeks. At the same time, change must be managed. Configurability should not sacrifice control or auditability. Reacting to the changing environment often needs to be close to real time. The configuration process needs to preserve control and accountability. Having to call on programmers every time a change is needed is not a viable long term solution.
- Ease of Use: Irrespective of how functionally rich a software is, its effectiveness is heavily dependent on how users can consistently and easily use its features. An elegant, lag-free, easy-to-understand user experience and interface are critical. A good loan servicing platform with all its high-end integrations at the back-end, shouldn’t be complicated to use for both employees and consumers, alike.
- Efficiency: Lending companies need loan management software that can eliminate the need for tedious paperwork. A single database that allows for seamless transition from origination to servicing, and collections is another key requirement. An efficient system will allow lenders to scale their business without a linear increase in staffing, improving profits.
- Flexibility: Loan management software must encompass modern tech-stack such as rest-based APIs and reporting solutions. It should easily communicate with other widely used industry specific solutions. A cloud-based software should help lenders deploy a fully flexible software system guaranteeing quick implementation.
- Customizability: Not all lenders are alike. Every lender is looking to create differentiation beyond terms and lending rates. No loan management system can accommodate these variations out of the box. The ability to customize the software without changes to the core source code and compromising upgradability is a key requirement.
- Scalability: Lending software cannot put constraints on growth. It is important the technology stack and architecture are such that it can support both smaller and hyper-scale lenders.
- Mobile Capable: With evolving user behaviors and expectations, it is important for loan management solutions to have a responsive user interface and be mobile capable as well.
How to Get Started
We hope this blog has been helpful in providing you with insight into what to look for in a loan management system. DecisivEdge specializes in specialty lending solutions. If you have questions or additional insight into any of the above, contact DecisivEdge today.