The global lending market is growing at an incredible pace.
According to latest figures by the Business Research Company, the global lending industry grew from $6036.37 billion in 2020 to $6932.29 billion in 2021 at a staggering CAGR of 14.8% & if the growth continues at the same pace, the industry will be worth more than $8809.55 billion by the end of 2025.
While there are a number of factors influencing this meteoric rise of the global lending market, automation & digitization are playing a predominant role & this can easily be witnessed in the lending softwares of today.
Gone are the days when you could rely on legacy systems to monitor your entire loan portfolio & manually manage your operations right from borrower onboarding to repayment at a snail’s pace.
The modern borrower wants their financial products to be customized from scratch while at the same time made available to them at a moment’s notice & all this can explicitly be achieved by leveraging a modern lending software.
But while choosing a lending software, which options should you lookout for the most? That is exactly what we will be answering in today’s blog post.
Without further ado, let’s get started.
Must-Have Features in Every Lending Software
Now that you are well versed with the criticality of having a fully automated & digitized lending software in order to meet the needs of your customers, shared below are 5 features in our opinion which are must-haves.
Customization
The modern borrower is one who demands customization in every aspect of their lives & their choice of financial products are no different. However, how can you render your customers customized lending solutions whilst your system lacks the same & thus, customizability should be one of the first features you should look for in your lending software.
Instead of opting for out of the box solutions wherein standard modules are offered, you should rather approach vendors who can customize their offerings to your exact requirements. Additionally, customization not only ensures that you can effortlessly meet the needs of all your customers but also that your business processes are streamlined like never before.
Integration
As a past user of legacy lending systems, I am sure you are well versed with the methodology wherein each of your softwares work in isolation from each other, as they are only designed to work on only one part of the entire lending value.
Although these systems were in use for a significant amount of time, these isolated operations were the core reason behind slow & inefficient value chains. Thus, to counter this issue, modern lending systems are designed in such a manner that they can effortlessly communicate with each other & collaborate in unison.
This is possible due to the advancement in automation technology as well as the wide array of integrations available, which makes it easier for the system to effortlessly connect with other complementary interfaces & collaborate to achieve the end goal.
For instance, there was a time when consumer onboarding & underwriting were performed by two separate systems, thereby contributing to inefficiencies. However, today due to the wide array of available integrations, both the loan origination system & the business rule engine can effortlessly communicate with each other, thereby making the entire process faster & more efficient, thus making integration the second most important feature you should look out for.
Regular Updates
Prior to the introduction of modern day cloud-native lending systems, lenders across the globe primarily relied on on-site systems. However, due to the location & connectivity constraints, developers were often impaired in terms of delivering regular updates to the software, thus essentially rendering it backdated in a couple of years.
Luckily, today due to the advancements in cloud architecture, lenders are actively making the shift to cloud-native lending systems, which arrive with a promise of consistent updates from the developer at regular intervals. Since the developer doesn’t need to physically visit the client on-site, newer versions of the software can be effortlessly delivered, thus ensuring consistent efficiency in operations. Thus make sure that adopt a cloud-native solution which arrives with the promise of regular updates.
Automated Processes
A prominent shortcoming of legacy lending systems was their increased dependence on human intervention & manual completion of the process.
This essentially meant that a majority of the tasks, especially those which are repetitive in nature, were also being executed manually, thereby reducing the efficiency of the entire operation.
On the other hand, in modern lending solutions, an increasing number of tasks are automated throughout the entire lending value chain. This chain of seamless automations not only decreases the turnaround time of the final deliverable but also ensures that the system is performing at peak efficiency, contributing to higher profit for the lender.
Configuration
Last but not least, a key feature you should be eyeing in a modern lending software is the extent of configuration it supports.
Much like the earlier shared pointer of customizability, your lending software should arrive with a wide catalogue of configurations right out of the box & the vendor should make more available upon request. This will ensure the software is configured to meet your unique business needs & that of your customers in the long run.
In Conclusion
While investing in a modern lending software might be an expensive investment at the start, done correctly, the return on investment delivered due to the same is substantially higher.
Now that you know the most important features you should be on the lookout for, go ahead & discuss these with your key stakeholders, as we all can unanimously agree that it is high time your lending software got an upgrade.
Thank you for reading & I will see you in the next one.