There is a huge change in the tradition of approving and felicitating loans these days. The process is not just faster, but also caters to the requirements of customers in micro and macro-financing institutions. To sum up, the lending atmosphere is changing constantly and to address this dynamic environment, lending software has come into place. Owing to the various government regulations and the growing competition in the field, lending businesses have to ensure that their services are adaptable, agile, fast and scalable. All this, while being cost-effective.
Some of the key benefits that leading software render include increased digital penetration, automated loan processing, risk reduction through smart scoring, reducing time to market, and increased loan processing efficiencies. However, choosing the right software comes with a lot of deciding parameters.
Short and long-term business requirements
A lot depends on the short- and long-term goals of a business. Therefore, before investing in lending software, it is important to identify the strategy which will drive the business and the capacity of the present infrastructure to take an upgrade. It should also be determined if there is the workforce to handle the complexities that come with the software. This would also involve decisions pertaining to replacing the entire system with a new platform that serves several purposes together. Once the software is in place, it is also important to set up a dedicated IT team to be able to handle the same during exigencies. It is always better to choose providers who can act as strategic partners- someone who can manage the current business needs, along with stabilizing the system when it gets an upgrade.
Cloud-based versus on-premises
Small businesses often do not have the bandwidth to manage on-premise lending systems, owing to the capital and the attention that they need. This is when SaaS or Software-as-a-Service comes to one’s aid. It is not only easy to manage and maintain but also customized to suit the business requirements. Incidentally, the cost of building a dedicated IT team can be avoided. It is also noteworthy that SaaS options will also have a lower set-up cost than an on-premise system. This is because the platform development costs are spread across all the subscribers.
Having said that, it is also important to understand the advantages that on-premise setups may render. Businesses have full control over the way it functions. Experts believe that on-premise lending systems work best for large lenders who have the capacity to manage a cybersecurity team and an IT team to manage 24X7 uptime. Some organizations also choose to maintain systems behind their own firewall, to be extra cautious.
The lending software must be easy to deploy and easy to learn
Ensure that the system that has been chosen is easy to install. If it has multiple layers of programming involved, it is bound to cost more. Moreover, it would need a dedicated team of IT professionals, which means costs going up by notches. It is important to test drive the program before with a free trial before the final decision is taken. Training the staff across hierarchies is important since it is of utmost importance that everyone is on the same page when it comes to the operating system of the lending software.
Whether the service provider as 24X7 technology and customer support
System outages are normal and therefore it will be common for Microlending software too. It is therefore essential to determine if the providers have a dedicated support team to address all issues related to outages. These support teams must be solution-oriented and trained to resolve issues during the first contact itself. Multiple follow-ups would mean longer run-on time and high cost. The best software providers offer a variety of communication channels like online chat, email, help desk, and more.
A track record to fall back on
Most of the leading software providers run due to word-of-mouth recommendations, especially in small-scale businesses. Do not fall back on high promises, advertising messages or product and services claim. There are other ways to confirm that you are getting the best software on board- for example, verify with the provider if their core business is software lending, look for online press releases announcing constant upgrades and new product releases. One can also check websites like Capterra about customer experiences with particular software. It is also important to check if the technology has earned industry awards from organizations like the MAS Fintech Award.
Smart automation for better functioning
In this age of Artificial Intelligence and Big Data, it is imperative that the lending software works on “intuition”. It must be acknowledged that this software is much beyond the collection of features and functions. They are a way for businesses to run profit while tapping the facilities and features they offer. Determine if the software automates multiple mundane tasks so that the loan evaluators and managers can concentrate on analysis and high-level decisions.