With hope for a quick economic recovery from coronavirus lockdowns seemingly dashed by the contagion’s resurgence around the globe, financial-service firms, retailers, and business-to-business providers are looking with renewed intensity for adaptations to the pandemic and nascent post-pandemic protocols.
For some businesses, COVID-conscious office layouts, plexiglass partitions, and staggered shifts have come into view as components of workplace social distancing. For others, remote and contactless commerce will be make-or-break, with e-lending playing a prominent role in helping businesses and consumers rebuild around an amorphous new normal.
Rising demand for loan origination systems
E-commerce has been around since the mid-1990s at least. But fully supported e-lending took wing later, during and right after the Financial Crisis of 2008. Its first iterations formed the underpinnings of web-based lending through traditional players such as banks and credit unions, along with some direct-to-consumer forays by fintechs.
Since the mid-2010s, however, online lending has emerged as a force in retail, equipping businesses to extend credit to consumers at the cash register or on the road, with decisioning analytics performed in minutes rather than hours or days — and in some cases without the need for financial intermediaries.
“The point is to give businesses more opportunities to close more sales and deepen customer relationships while creating stronger loan portfolios and providing mission-critical business intelligence,” says Dmitry Voronenko, CEO and co-founder of lending-platform provider TurnKey Lender. “We’re seeing rising demand from traditional lenders and retailers, as well as from businesses involved in capital-equipment factoring, trade facilitation, and lease lending.”
Adds Voronenko: “Boiled down, it’s at the point now where a business that wants to extend credit can do it intelligently, efficiently, and on its own terms. All you need is internet connectivity.”
That’s all great, of course, but how does a business shop for a loan-origination system, or LOS, in the midst of a pandemic?
Best practices for LOS shopping
For Voronenko, like most experts in the field, it comes down to matching needs with options in the marketplace, a process that starts with establishing a basic understanding of the lending space. To help lenders, whether novice or established, succeed in their search for a flexible and reliable LOS, we’ve compiled the following checklist.
- Get a good overview. TurnKey Lender recommends that lenders, especially new ones, start getting up to speed on their understanding by visiting online resources, including its own website. Operating on the premise “an informed customer is the best customer,” an LOS’ salesforce is another great resource for prospects looking to match their needs to particular system providers. In addition, user-rating platforms like Capterra and G2 can be great sources of information about particular offerings’ real-world performance.
- Every lender is different. Find an LOS provider that understands that. Effective responsiveness requires speed as well as precision. Lenders want digital capabilities they can roll out quickly to support customers in the current crisis and beyond. An LOS provider like TurnKey Lender provides solutions that are configurable for each client firm using flexible flow-building and rules-management tools that makes its time-to-market hyper-competitive.
- Increased importance of data security and customer privacy. TurnKey Lender demonstrates its readiness on this front through third-party certifications. The main gauge for best practices in safeguarding the lender’s data and their customers’ peace-of-mind is the Open Web Application Security Project, or OWASP, standard. TurnKey Lender is compliant with this standard, complying with the widely recognized ISO 27001 standard of information security, and the ISO 9001 standard for its quality management. These certifications ensure TurnKey Lender meets or exceeds all statutory and regulatory requirements.
- Lenders want a one-stop solution. Banks and other tenured lenders are turning away from siloed solutions for different stages of loan origination and processing, and for different credit products. TurnKey lender is at the forefront of this convergence, with the flexibility and power to support loans of every sort — all on one platform that features consolidated reporting for immediate insight on credit portfolios across product types.
- An LOS should equip the lender to compete, even with the big guys. TurnKey Lender is the “Intel Inside” many large- and middle-market lending platforms, through which it has processed millions of loans. These institutions achieve fast and accurate application processing, and superior customer experiences. An LOS provider that knows how big lenders operate can make its clients competitive with established digital lenders on all fronts.
- The right LOS will simplify operations, not complicate them. Does your business have the staff and the institutional knowledge to develop, maintain, and manage an advanced lending software platform on site? If not, you may take a cue from many small- to midsize lenders and opt for a cloud-based “lending as a service” model — which is also the choice these days for many large organizations eager to balance cost-savings with data security.
- In the current crisis, speed to market is paramount. Because its uses flexible workflow and rules-management tools, an LOS provider like TurnKey Lender can get your lending operation up and running quickly, so you can get to work extending credit where it’s needed most.
As an additional incentive to businesses contemplating the move to e-lending, it’s worth noting that consumers’ online habits seem to have changed in the pandemic, with some assuming the transition will stick.
Lenders, welcome to your digital future
According to an early May 2020 survey of consumers by payments-industry tracker PYMNTS, 26% of generation X who shifted routines to online platforms don’t plan to move back offline once the pandemic is over or under control. Perhaps more impressive, 21.7% of boomers and seniors say the same, as do 23.8% of millennials, and 24.6% of “bridge millennials” (between age 32 and 40).
“The stage was set for an accelerating migration to e-lending before the coronavirus pandemic — as much a function of raw demand as where smart technology is taking us as a society,” says TurnKey Lender’s Voronenko. “But this unfolding event, as tragic and disruptive as it is, has significantly heightened both need and awareness of it. In short, it’s a solution whose time has come.”
Reach out to the TurnKey Lender team today to learn more.