- Short and long-term business needs
- Cloud-based, or on-premises
- Comprehensive, integrated origination and servicing functionality
- Smart automation, proprietary credit scoring
- Easy to deploy, easy to learn
- 24/7 technology and customer service support
- Proven track record
- Affordable investment
1. Short and Long-term Business NeedsThink of lending software as a tool to support your business strategy. Start the decision process by reviewing your short-term business goals, long-term business goals, your current software packages and current technologies. This review will act as the basis for a software and technology gap analysis. Here are some of the top questions you’ll need to answer with your team:
- Who will use the software system? Hands-on managers as they originate and service accounts? Financial directors as they pull ad hoc or monthly reports?
- Does your current software support their current needs? Could another package or platform provide more automation, better credit scoring or better reporting?
- Could a single comprehensive package or platform replace several pieces of software that you’ve cobbled together over the years?
- Does your current software support your long-term business goals?
- Which additional features and functionality could you add that would improve efficiencies and credit decisions?
- Does your current infrastructure support the type of additional functionality you need?
- Do you have a dedicated IT staff to manage an in-house lending software system?
2. Cloud-based, or On-PremisesAs a small to mid-size lender you probably don’t have a dedicated IT department to develop and manage an advanced lending software program. That’s one of the reasons SaaS (Software-as-a-Service) has become so prevalent over the past few years. It’s easy to deploy, less expensive to launch than comparable on-premises programs, and it’s fully managed for you. SaaS platforms are hosted from a remote, cloud location. The service package includes redundant back-up systems and high level cyber security. These software systems deliver a variety of benefits to SMB lenders. As a subscriber you gain easy access to advanced features and functionality. You enjoy regular maintenance, software upgrades and new product releases, along with IT and customer service support. The program is fully managed at a platform level, so there’s no need to build and fund your own IT department. In addition SaaS options tend to have a lower set-up cost than a comparable on-premises program, because the platform development costs are spread across all the subscribers. SaaS programs are a good choice for the lender who wants to outsource systems and technology, and focus on sustaining a competitive edge. The other option is an on-premises program, which has the main advantage: control. On-premise deployment tends to work best for three types of organizations. A larger lending group with a dedicated IT department that can manage cyber security and 24/7 uptime. A lender with databases that are complementary to the lending software. The type of integrated program where both systems need to be hosted on one server cluster. Or an organization that prefers to maintain their systems behind their own proprietary firewall.
3. Comprehensive, Integrated Origination and Servicing FunctionalityIn today’s lending environment the only constant is change, and your systems must keep pace. The ideal software partner offers an integrated origination and servicing platform that’s comprehensive as well as flexible. A good choice for an SME is a program that offers a menu of individual modules. You choose the unit with the features and functionality you need today. And you retain the option to access additional features at a later date. Here are some loan origination features and functionality to consider:
- Automated decision-making and borrower evaluation cycle
- Automated calculation of optimal loan parameters: loan amount, term of the loan, interest rate, etc.
- Customer risk segmentation
- Flexible management of the lender’s credit rules, credit policies and scoring models
- Remote access for distributed sales points
- Setting individual evaluation processes for different products, portfolio segments and business lines
- Evaluating the efficiency and adequacy of the loan origination system’s performance and staff productivity
- Ability to swiftly adjust credit policy (new lending rules, changes in lending rules, appropriate risk margin)
- Customized tracking and reporting